US Financial News: news summary | 25 June 2023
US Financial News: Latest Updates
Headlines | Sunday, 25 June 2023
- Fed Chair Jerome Powell tells Congress interest rates are likely to continue increasing this year
- Initial unemployment claims held steady last week at 264,000
- The program that grants double food stamps in NY
- Walmartwill pay 4 million dollars in compensation to customers
New York sees biggest stabilized-rent hike in decade
The New York City Rent Guidelines Board has voted to pass a rent hike for the roughly one million rent-stabilized apartments in the city.
The board agreed to a 3% raise on one-year leases and an increase in two-year leases in intervals of 2.75% the first year and 3.2% the second.
The changes will take effect on Oct. 1.
The decision marks the highest rent increase since mayor Michael Bloomberg was in office, when the board he appointed hiked rents up between 4% and 7.24% in 2013.
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Retirement is a phase of life when you stop earning a regular income from work. By preparing for it, you can build a financial cushion that will provide you with a secure and comfortable lifestyle during your retirement years.
Not many Americans are prepared for the expenses they will have to deal with in their golden years.
Middle-class homebuyers face worst housing shortages
Middle-income homebuyers are hit hardest by the housing shortage.
Per Yahoo Finance, while 51% of earners in the US make $75,000 or less, only 23% of available home listings are affordable for these households, according to a report published by the National Association of Realtors and Realtor.com. The situation is even worse in cities like San Jose, California and New York, where only 5% and 13% of respective available listings are affordable for these families.
Higher-income people have more options in their income bracket. While only 7% of households make $250,000 or more, they can afford 85% of listings shown.
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World at critical point in battle against inflation
The world's central bank umbrella body, the Bank for International Settlements, has called for more interest rate hikes, warning that the world economy was now at a crucial point as countries struggle to rein in inflation.
Despite the relentless rise in rates over the last 18 months, inflation in many top economies remains stubbornly high, while the jump in borrowing costs triggered the most serious banking collapses since the financial crisis 15 years ago.
BIS general manager Agustin Carstens said, "The time to obsessively pursue short term growth is past. Monetary policy must now restore price stability. Fiscal policy must consolidate."
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Each month, the Social Security Administration sends payments of up to $914 as Supplemental Security Income. The SSI program provides monthly payments to seniors, as well as people with disabilities, including children.
EDUARDO MUNOZ / REUTERS
Retailers targeted with bomb threats, seeking bitcoin and gift cards
Law-enforcement officials and retailers are investigating a recent wave of bomb threats across the US, targeting grocery operators and other stores, according to the Wall Street Journal.
Retail companies including Kroger, Walmart, and Amazon's Whole Foods Market, among others, have received bomb threats at their stores in recent months, the report said, adding that some callers demanded gift cards, bitcoin or money and threatened to detonate bombs if payments were not made.
These threats have been spread across various areas from New Mexico to Wisconsin. At a Kroger-owned store in New Mexico, an employee received a call from a suspect who asked her to wire money and said a bomb would go off if she called the police.
A similar incident was reported in a suburb north of Chicago, where a caller told a Whole Foods Market employee a pipe bomb had been placed in the store and demanded $5,000 in bitcoin, according to the Wall Street Journal.
The FBI said it is working with local and state law-enforcement officials and asking members of the public to maintain awareness of their surroundings and report any suspicious activity to law enforcement, the newspaper added.
According to the report it is unclear to authorities whether the threats are part of an organized effort.
(REUTERS)
The covid-19 pandemic and the subsequent inflation that has come with the economic rebound placed put a lot of stress on household finances. For families that are struggling to make ends meet, they may be able to participate in the Supplemental Nutrition Assistance Program (SNAP), previously called Food Stamps.
The program is the largest food assistance program in the United States, with over 41 million people receiving benefits. That number is an increase of nearly 6 million since before the pandemic, when the program reached its lowest number of participants in 10 years in 2019.
Read more in our full coverage.
The US Department of Justice has rewarded nearly $4 million as compensation to victims of a Walmart gift card scam.
According to Top Class Actions, the Walmart gift card scams allegedly began in 2015 when scammers instructed victims to purchase Walmart gift cards ranging from $500 to $1,000.
Between 2016 and 2017, Walmart froze balances on gift cards suspected of being part of the fraudulent scheme. Subsequently, the Department of Justice sought this frozen money so it could reimburse customers.
The Department of Justice filed a lawsuit for the forfeiture of the $4 million in gift card balances frozen by Walmart. This money will be available as compensation payments to affected customers.
Federal Reserve Chair Powell provides update to Congress on the central bank's monetary policy
The U.S. economy slowed significantly last year, and recent indicators suggest that economic activity has continued to expand at a modest pace. Although growth in consumer spending has picked up this year, activity in the housing sector remains weak, largely reflecting higher mortgage rates. Higher interest rates and slower output growth also appear to be weighing on business fixed investment.
The labor market remains very tight. Over the first five months of the year, job gains averaged a robust 314,000 jobs per month. The unemployment rate moved up but remained low in May, at 3.7 percent. There are some signs that supply and demand in the labor market are coming into better balance. The labor force participation rate has moved up in recent months, particularly for individuals aged 25 to 54. Nominal wage growth has shown some signs of easing, and job vacancies have declined so far this year. While the jobs-to-workers gap has narrowed, labor demand still substantially exceeds the supply of available workers.1
Luxury sales increasingly coming from high-end shoppers
When it comes to shopping, the rich are definitely the ones doing the spending. According to management consulting firm Bain & Co., luxury brands focused on wealthier consumers in the US are performing better than those who appeal to aspirational shoppers on lower incomes who are deterred by the economic uncertainty.
In its twice-yearly report, Bain increased its annual sales forecasts for the global personal luxury goods market - spanning clothing, accessories and beauty products - and expects growth of between 5% and 12% this year, compared to previous expectations of between 3% and 8%.
"There is an overall slowdown mostly driven by the aspiration side of the customer and more entry prices, so categories like streetwear and sneakers are a bit underperforming as we speak," partner Federica Levato told Reuters.
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Fourth of July barbecue to cost more this year
The traditional Fourth of July barbecue is once again going to cost more this year, according to the latest report from Wells Fargo.
The price of sirloin steak is up 2.9% compared with the same time last year, Wells Fargo said, citing the Bureau of Labor Statistics' May Consumer Price Index. That comes out to a hefty price tag at $10.75 per pound.
You might get a better deal with hamburgers, as ground beef is up less than 1% with an average cost of $5.36 per pound.
Pork and chicken are your best bet for affordable protein.
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Ford reportedly about to cut hundreds of jobs
Ford Motor Co. is planning to lay off a minimum of "several hundred" salaried employees, starting as soon as next week, the Detroit Free Press has learned.
The action will be limited to white-collar workers in North America, perhaps just the US.
The third of three units at the company, Ford Pro commercial, is not part of this job reduction. The carmaker employs about 174,000 white- and blue-collar workers globally.
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Hello and welcome to AS USA's live blog covering financial news from Wall Street to Washington, DC.
Fed Chair Jerome Powell testified in front of Congress this week to provide an update on where the central bank stood in its fight against inflation. Chair Powell made clear that while no additional rate increases were implemented in June, rates would likely be hiked again starting this summer.
Last week initial unemployment claims rose to 264,000, up slightly from a week prior. The high numbers are an indicator that the labor market is softening, as figures like these have not been seen since early 2017.