USA finance and economy: summary 10 june
Headlines | 10 July 2022
- US postage increases start 10 July 2022
- Elon Musk moves to cancel $44 billion dealto buy Twitter
- BLS announces that 372,000 new jobs were added in June; but unemployment stayed at 3.6%
- Workers across the country may benefit from a minimum wage increase this month
- Dollar surges reaching near parity with Euro for first time in 20 years
- Biden administration announces new programs to help student loan borrowers
- National average gas prices continue to fall now at $4.684 per gallon
Helpful links and Information
- How much can I earn and still get disability benefits?
- July schedule for Social Security benefit payments
- Unemployment benefits:California recovers over $1 billion in fraudulent benefits
Inflation is up across the country. All of the economic uncertainity is reflecting in the presidential approve rate. We took a look.
White House Press Secretary defends adminstration's economic response
Well, I would point you to the jobs numbers today. We saw 375,000 jobs in this pa- — in the past month. While we understand what the American public is going through at this time, that is a good sign. That is a good sign for the economy.
And we also saw that unemployment rate is — it remains at 3.6.
And in — also, in those numbers, we saw that we are — we have created — we are back to the pre-pandemic job numbers when it comes to the private sector, which is incredibly important. And we’ve added jobs. We saw 1 million jobs added in this past quarter.
All of those things are very important as we talk about moving this historic economic recovery into tran- — into a transition so that we can really truly deal with inflation.
Mortgage rates drop for second straight week
Mortgage rates have done an about turn after hitting levels not seen since 2008. Peaking at 5.81 percent for the week ending on 23 June they have pulled back half a percentage point over the course of the past two weeks. Fears of a looming recession have cooled a red-hot housing market which have seen prices rise from between 32 to 39 percent since covid-19 caused disruptions reverberating through markets still today.
As of today, Sunday 10 July 2022, the United States Postal Service (USPS) is raising the price of postage in the US, with a regular first-class stamp now costing two cents more than before.
The Social Security Administration handles benefit payments for four major programs including retirement, disability, survivors and Supplemental Security Income. The agency spreads out payments across the month based what type of benefits a recipient is receiving, when they were born and when they began collecting benefits.
All recipients are required to sign up to receive their benefits via electronic deposit either into a bank account or onto a Direct Express Debit Mastercard. This has the upside that your benefits won’t get lost in the mail and are there on the day they are scheduled to be sent.
The Federal Reserve has moved to put the brakes on runaway inflation by raising interest rates at the most aggressive clip since 1994. The knock-on effect though is higher borrowing costs on top of soaring housing prices for those looking to buy a home.
However, some relief may be coming to certain markets.
Cooling housing market could make it easier for homebuyers to get a foot in the door
Housing prices began skyrocketing during the covid-19 pandemic and have kept going up through this year with an average increase of 18.5 percent, around five times what they would rise in a normal year. This has led to talk about the market being bubbly and possibly another housing crash.
Experts, though they do see the market cooling, don't foresee the bust that caused the Great Recession. Prices increases tapering off could be good news for those trying to get a foot on the ladder to home ownership, however they will still have to contend with rising interest rates making their mortgage costlier.
Investors putting money into US greenbacks as the Fed raises rates has strengthen the dollar against other global currencies while oil prices remain high.
Larry Summers says millions will need to be laid off to lower inflation
The Federal Reserve is struggling to get rising prices under control by aggressively raising interest rates. When policymakers at the central bank meet in late of July they are expected to implement another rate hike, with talk of a three-quarters of a percent jump for a second time in a row.
Although Chair Jerome Powell has said that the Fed doesn't want to push the US economy into recession, that it would be the lesser of two evils. Former treasury secretary Larry Summers however thinks that only with mass unemployment can the rate of inflation be brought back to the two percent target level.
Doing some back of the envelope calculations, he estimates that unemployment will need to go above five percent for five years or ten percent for one year. That would mean around 10 million people thrown out of work.
Worst food crisis in a decade made worse by food export restrictions
The globe is facing the worst food crisis in a decade which has been exacerbated by countries restricting the export of food and fertilizer in an effort to stabilize prices at home. However, the actions have had the opposite effect with the price of wheat 34 percent more expensive since the beginning of Russia's invasion of Ukraine.
One seventh of that price rise can be linked to the 22 that imposed restrictions on their wheat exports. Studies looking at the last food crisis from 2008 to 2012 showed that if restrictions had not be put in place, prices on average would have decreased by 13 percent.
US crosses milestone on path to mass adoption of electric vehicles
The Biden administration has called for half of new vehicles to be all electric powered or plug-in hybrids by 2030. If the US follows a similar trajectory as the 18 nations that came before, it could meet that goal and still have several years to spare.
For the past six months EVs have made up over five percent of new car sales, a tipping point when mass adoption of the technology takes off. If sales in the US follow the trend of other countries, a quarter of new car sales could be all electric powered by the end of 2025.
Workers across multiple states will see a raise this month as minimum wage increases take effect. Nationally the minimum wage sits at $7.25 per hour, but many states have passed bills to increase their own.
Rather than a one time increase, states often chose to increase the wage over time as to not create economic shocks for businesses. The drawback of this method is that the increase can be offset by inflation by the time the process ends.
Various states are in the middle of increasing their minimum wage and July marks one of these milestones.
Investing in any financial asset requires you do your research, but in the case of digital financial assets expect a whole new set of obstacles to deal with.
In April, Tesla CEO Elon Musk sent a letter to the Twitter Chairman Bret Taylor offering to buy 100 percent of the social media company. Despite putting in a poison pill to avoid being taken over by the electric vehicle magnate, the board of directors eventually agreed to the sale.
However, soon after it appears that Musk got buyers remorse and put the deal on ice on the pretext that he wanted to verify Twitter's claims that less than 5 percent of account on the site were bots. Now, claiming that he hasn't received the necessary information to determine how many spam accounts there are he wants to call off the deal altogether.
Taylor says that a deal is a deal and the company will take the matter to court.
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Welcome to our dedicated financial news live feed bringing you all the latest news and information from the United States on Sunday, 10 July.