USA finance and payments: summary news 25 April
Headlines: Monday 25 April 2022
- Average mortgage interest rates hit 5.1 percent, forcing many to revise their housing market projections for 2022.
- After seeing its worst day of the year Friday, markets closed in the green today: Dow Jones (0.7%), NASDAQ Composite (+1.26%), S&P500 (+0.57%),
- Crude oil trading below $100, while the price of gas has moved little remaining above $4 for most of the nation.
- Congress set to return from recess this week to take up Biden spending proposals
- Full student debt cancellation has not been proposed, but the White House has cancelled some borrower's debt. Who is effected?
- Tax Day has passed for the majority of Americans, how to find out how much you owe.
- Stimulus checks can still be claimed, if you haven't received the federal payments.
Helpful links & information
- What are thenine states that do not pay income tax and why?
- Missed the tax deadline?These are the penalties to be aware of.
- Can federal student loans be forgiven after 10 or 25 years?
High prices and US inflation down to Covid and Putin - Biden
President Joe Biden has said that the Covid-19 pandemic and Russia´s invasion of Ukraine are the prime reasons why prices have risen so sharply in the US and around the world. "Let's be absolutely clear about why our prices are high now. Two reasons - first Covid. The way the global economy works, if a factory in Vietnam makes a computer chip and shits down due to Covid in Vietnam, the ripple effect can slow down automobile manufaturing in Detriot. So because of the pandemic, we've had disruptions in our supply of improtant materials. So prices went up. Just look at automobiles - last year, they accounted for one third of all the inflation in America. So I am calling on Congress to pass the Bipartisan Innovation Bill, so that we can make more computer chips here at home and speed up the supply chains," he said. "The second big reason for inlfation is gas prices. And it's Vladimir Putin's gas price increase. Putin's invasion of Ukraine has driven up gas prices and food prices all around the world. I am doing everything I can to bring it down. That´s why I authorised the release of 1 million barrels per day for the next six months from our Strategic Petroleum Reserve - the largest reserve release in history".
Democrats take aim at oil corporations
Something truly rotten is going on with America's energy sector... There is something deeply wrong about seeing the largest oil and gas companies in the world drenched top executives and wealthy shareholders with cash while Americans are struggling at the pump.
The majority of taxpayers managed to file their 2021 tax returns on time, but there were a fair number of filers who still need to turn in their tax declaration. The IRS advises to get your tax filing in as soon as possible, not only to receive your tax refund but to avoid any potential late penalties.
Gas prices on the rise again
Consumers in the United States have been experiencing significant price rises in recent months as the economic recovery outpaces the rate of wage increase.
Inflationary pressures and supply chain issues have seen the cost of many essential products rise considerably in the past six months, but the recent ban on Russian oil and gas has seen the price of gasoline rise even higher.
To combat inflation, the Federal Reserve has begun to increase interest rates. Already, the average rate of a mortgage has nearly doubled since this time last year, pricing some would be home buyers out of the market.
Last year, the housing prices increased by more than eleven percent, representing the single largest one-year increase since the 2007 Financial Collapse. While, prices are still expected to increase this year, many are estimating that it will be by a smaller margin than what was seen in 2021.
A Starbucks in New Jersey becomes the first to unionize
Bernie Sanders took to Twitter to congratulate workers at a Starbucks in Hopewell, New Jersey, who became the first in the state who voted to unionize. The workers at Hopewell are the 30th location to to approve a union. Sanders congratulated the workers and noted that their efforts serve as inspiration to workers across the country who are organizing for better wages and working conditions.
At a time where inflation is cutting into the purchasing power of workers because their wages are not keeping up with increased costs, collective organizing has taken on an entire new meaning. Union membership in the has fallen to historically low levels in recent years and it seems that the trend may be changing.
How can I track my tax refund?
As tax season draws to a close, the IRS is experiencing call volumes at much higher levels than what is typical. For those looking for a status update on their tax return, the IRS offers an online tool called: Where's My Refund. This tool allows users information as to when they should expect their refund to be sent or if there are issues that need to be corrected by the taxpayer before the refund will be sent.
To use the tool one will need to provide their social security number, their tax filing status (single, married, head of household), and the refund amount calculated based on the information provided by your refund. If all the information provided to the IRS is correct and a return is filed electronically, the tax authority estimates a refund being sent within twenty-one days.
President Biden's message to corporations
Here’s the point: Of the Fortune 500 companies, 40 of them last year, they made $40 billion and didn’t pay a single, solitary penny in taxes. It’s not right. It’s just not fair. All you got to do is just pay a fair share. And we can do all of this and so much more, but that’s not what — my point of being here tonight — or today, I should say.
The construction sector is "feeling the pinch" from inflation and increased interest rates
In an effort to combat inflation, the US Federal Reserve, plans to increase interest rates. One sector this change will impact rather quickly is the housing and construction. Already, homebuilders are “feeling the pinch” as they are now paying higher prices to construct new homes. If the builders are able to pass along the cost to the home buyer there is a clear problem. But why?
If inflation is temporary and over the coming year prices begin to fall, a contractor will be unable to pass the increased costs to the consumer. Because while costs may be higher, this does not have a direct impact on the value of the asset. The value of a home is based on a lot more than just the wood, plaster, paint and other materials used to build it. Even if wood, plaster, paint and other materials cost more in the short-run, it does not mean that those costs can be factored into the price of an asset. The same issue is happening in the car market. The price for chips has increased, but if car makers start increasing the price and overall prices start to decrease, a person will have paid more for a car than the actual value it holds.
Manchin set to shape Democrats clean energy initiative due to high energy costs
Democrats are set to sit down and continue negotiations on a $2 trillion spending package that includes proposals from President Biden on investing in families, education, health and combating climate change. The deal was scuppered by Senator Joe Manchin at the end of last year when he said he just couldn't vote for a raft of measures his fellow lawmakers had spent months hammering out.
Now with Americans upset about rising prices, especially at the pump, and Democrats needing to get something done before the midterm elections to improve what look like worsing chances at the polls, Manchin will be able to swing more weight in the negotiations on climate proposals according to Wall Street Journal sources.
He is likely to push for more leases on feredal lands to tap into fossil fuel resources. As well investments to help Western allies reduce their dependence on Russian oil and gas, making it easier to receive shipments from the US in the short term. While in the longer term transitioning to renewable energy sources.
What is the Biden administration doing to tackle inflation?
Member of the Council of Economic Advisors to the White House Jared Bernstein laid out some of the measures that have been taken by Biden's administration to alleviate the financial stress on American households due to inflation in response to Senator Elizabeth Warren saying not enough is being done.
Speaking to Squawk Box Bernstein says he has "never been part of an administration that has tried to do more to help working households get by in this period of elevated crisis," pointing out Biden's work to alleviate bottlenecks at America's ports and $18 billion in student loan debt forgiveness.
On the latter, the Department of Education recently announced that after a review of how federal student loan programs have been administered found millions of borrowers have been improperly steered into forbearance when they could have qualified for the income-driven repayment program (IDR).
Now the Federal Student Aid will conduct a one-time adjustment that it estimates will result in the immediate debt cancellation for 40,000 borrowers under the Public Service Loan Forgiveness Program (PSLF) and several thousands more with older loans under IDR. Furthermore, 3.6 million will will get at least three years closer to seeing their debt forgiven under the IDR program.
This is in addition to previous steps taken to cancel the debt of over 113,000 public servants through improvements to PSLF, more than 400,000 borrowers who have a total and permanent disability, almost $2 billion to over 100,000 borrowers who were defrauded by their school and $1.2 billion for borrowers who attended ITT Technical Institutes before it closed.
Congress returns from 2-week break, will take up Biden spending proposals
The Senate will convene Monday, while House members start their next session on Tuesday after being out of town for two weeks. On their laundry list of items to take care of is President Biden's request for more money to tackle the covid-19 pandemic.
They will consider a bill to inject $10 billion more to fight the virus, less than half of what the president had called for. Lawmakers also plan to restart negotiations over a $2 trillion version of Biden's proposals to invest in clean energy initiatives and families which the White House says will help combat inflation.
The legislation stalled at the end of last year over an extension of the enhanced Child Tax Credit. Behind the scenes Democrats have been speaking with Senator Mitt Romney on finding an alternative proposal that would shift responsibility from the over extended IRS to the Social Security Administration to provide families with monthly payments to aid in the cost of raising children.
Workers at second Amazon warehouse to vote on unionizing Monday
Amazon associates at Amazon warehouse JFK8 recently voted to unionize, the first one in the nation. On Monday a second New York area Amazon warehouse will decide whether they will join the Amazon Labor Union.
With interest in unionizing being expressed by Amazon workers at over 100 other US worksites, success or failure of the vote will influence those efforts. As well, Amazon is contesting the results of the JFK8 vote before the US National Labor Relations Board. In an attempt to depress the vote, the company is telling workers that unions cannot guarantee better pay or benefits.
Rare earth minerals are metallic elements found in the earth’s crust which can be processed into increasingly vauable commodities. These elements and metals are used to make the motors for hybrid and electric cars, generators for wind turbines, military-grade weapons, and other technologies.
Contrary to the name, the concentration of these elements within the earth’s surface is actually quite high. Economically, however, finding high concentrations in a specific area is “rare,” making establishing a mine and processing center costly.
With China dominating the market, the US is scaling up its focus on mining.
Going cobalt free to make electric vehicles batteries cheaper, ethical
The price of lithium ion batteries fell by around 89 percent between 2010 and 2020 but one of the most expensive materials in them is cobalt. This metallic element which is mostly obtained through refining nickel ore represents roughly 30 percent of the cost of batteries that power everything from your mobile phone to electric vehicles. For a typical 80 kilowatt-hour battery, cobalt tacks on $800 to the price tag.
Besides the cost, cobalt also has a dark side, it is associated with human rights abuses and child labor prompting companies to seek alternatives to make cobalt-free batteries.
Have yet to receive your stimulus check payments? There is still time!
Those who are missing a payment, or received less than their full entitlement, can claim a back payment in the form of a Recovery Rebate Credit on their 2020 or 2021 federal tax return. Although the tax deadline for 2020 and 2021 returns have both passed, the tax agency gives filers up to three years from the due date of the return to file and receive a tax credit refund.
AS USA's Will Gittins explains how to check how much you've received as part of three rounds of federal stimulus checks paid out in the US since early 2020.
Electric buses to create US jobs and make transportion cleaner
Secretary of Transportation Pete Buttigieg and National Climate Advisor gina McCarthy take a test drive on one of Washington DC's new electric buses to explain how it is part of a national investment to make getting around cleaner and creating jobs in America.
The Infrastructure Investment and Jobs Act passed by Congress last year designated $5.6 billion toward the Low or No Emissions Bus Program, one of several measures to help the US reduce its greenhouse gas emissions while creating and improving jobs across the country.
Real average earnings fell in March
The Bureau of Labor Statistics is reporting that in March, real average earnings fell by 0.8 percent. This figure is calculated by looking at average hourly earnings which increased by 0.4 percent and the Consumer Price Index which increased by 1.2 percent. With the CPI is higher than any gains made in earnings, households see a decrease in their purchasing power as wages have not kept up with inflation.
The wealth gap keeps growing despite corporate pledges to reduce inequality
A new report looks at whether corporate leaders kept their pledges to adopt “stakeholder capitalism” and enhance racial and economic equity to reverse the decades-long trends of widening inequality. The study examined 22 of the nation’s best-known companies which employ more than 7 million frontline workers in sectors spanning retail, delivery, fast food, hotels, and entertainment.
The results show that they failed to seize the historic opportunity that the covid-19 pandemic presented them with as their companies made record profits. Of the 22 companies, only Costco pays its frontline employees a minimum wage that comes close to a living wage, just seven others pay at least half of their workers a living wage.
Despite wages rising between 2 and 5 percent through October 2021, inflation has eaten into those gains that frontline workers made leaving a majority earning less than a living wage, enough to cover just their basic expenses, of just under $18 per hour.
The 7 million workers across the companies saw $27 billion in additional pay which, if equally distributed translates into just under $1 an hour for a full-time employee working 40 hours per week or $3,700 per year. Those gains pale in comparison to the $1.5 trillion richer the shareholders grew, 57 times more than what went to workers.
New York City was the epicenter of the covid-19 pandemic when it crashed ashore in the spring of 2020. Restrictions to stop the spread of the devastating virus saw unemployment spike with businesses shuttered and the flow of tourists drying up.
New York City is making a come back after the economy was devastated by the covid-19 pandemic, but which jobs are in demand in the Big Apple?
Intital unemployment claims have flat lined
The Department of Labor reported late last week that for the week ending on 16 April, initial unemployment claims hit "184,000, a decrease of 2,000 from the previous week's revised level." In recent weeks, the numbers have flat-lined and are not continuing the downward trend seen in 2021.
What is the situation at the state level?
States with the highest number of initial claims for the previous week were Missouri (+7,194), Michigan (+5,950), California (+3,215), Indiana (+3,193), and Texas (+2,617). The largest decreases were tracked in Ohio (-3,886), Wisconsin (-1,159), Oklahoma (-776), Utah (-270), and Hawaii (-219).
Student debt payments have been paused for more than two years and the loan companies are doing *just fine* without them.
Cancel student debt, POTUS
New plans from the Biden camp have opened the door slightly towards further debt forgiveness, but critics say they don’t go far enough.
These plans included a revision of income-riven payments to make it easier for students to qualify for measure in which their loans could be automatically cancelled after 20 or 25 years.
While the White House has not budged from their opposition over President Biden using his executive authority to cancel up to $50,000 worth of debt per borrower, smaller batches of loan cancellation have been announced.
AS USA's financial news live blog
Good morning and welcome!
Wall Street saw large drops at the end of trading down last week after Federal Reserve chair voiced plans to raise rates by half a point in May to counter inflation. We'll bring you the latests on what is being done to combat rising prices.
The deadline to file a 2021 tax return and pay taxes was last week, but what can you do if you missed it? Looking for how to track your refund? Want to know what Congress is considering to support US households combat inflation? We have you covered.