USA finance and payments news summary: Sunday 29 May 2022
US Finance: live updates
Headlines: 29 May 2022
- Key measure shows that inflation slowed slightly in April, but remains high at 6.3% year-on-year
- Gas prices in US remain at all-time high, currently $4.610 per gallon on average
- Joe Biden to make announcement on student debt relief in coming days
- US renews Chevron Venezuela license amid energy crisis
- Bitcoin drops back below $29,000, roughly 47% down over the past six months
- US Energy Secretary Jennifer Granholm accuses Russia of "weaponizing energy" with high gas prices
- Online searches for baby formula soar as shortages continue
- Pennsylvania proposes $2,000 stimulus check for residents.
- Concern over high energy prices and insufficient power grid ahead of the summer months
- Target and Walmart profits drop and stocks plunge after posting financial reports
Helpful info & links
- What is the California State Disability Insurance (SDI) program?
- Which states spend the most money on Medicaid?
- New York Unemployment Benefits: what is the maximum?
California’s State Disability Insurance program provides short-term wage replacement for those who cannot work due to a non-work-related medical condition.
AS USA's Greg Heilman has the full lowdown on the CSDI scheme
Can you be taxed on Social Security benefits?
Benefits from the Social Security Administration (SSA) represent a key form of financial relief for retired and disabled Americans who may not otherwise be able to support themselves. But some people are surprised to know that taxes can be levied against the benefit payments and the rate of taxation is dependent on a few factors.
Joe Elsasser, founder and president of Social Security support software Covisum, said: “There was the intent that it would only affect high-income earners when it was first passed in 1983, but over time, it’s reached further and further down into the middle class."
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Which states are suffering the highest rates of inflation?
Inflationary pressure are being felt right across the country at the moment, but some areas of the United States are bearing the brunt of the price rises. This report from CNBC examines the states with the highest rates of inflation, and takes a look at what is being done to address the situation.
The current prise rises crisis for consumers is focusing some thoughts on retirement prospects. The average American spends around 20 years in retirement, so this phase of your life needs careful thought through.
How do you know that you’re prepared for this particular big leap? What should you weigh up before taking that step into the post-work world? Here are some factors you should consider.
Inflation report shows slight, but significant, decline
"The [inflation] report showed annual inflation declining and average monthly core inflation at around 4% at an annual rate, down from around 6% in the three months before it. At the same time, inflation is still too high and Putin’s price hike continues to impact food and energy prices. There is more work to do and tackling inflation is my top economic priority."
Should employers offer wage increases to account for high inflation?
Walmart and Target are under pressure to offer modest wage increases to employees in response to the sustained high rates of inflation in the United States. Price rises across the board have weakened consumers' buying power and left millions of households struggling to pay for essentials.
But should this responsibility fall on the private companies, or should government be the ones to ensure that Americans are receiving a fair wage? The push for an increase to the minimum wage is continuing but the appears little appetite to push for any significant change while the US is still in the midst of the post-pandemic economic recovery.
Social Security Disability Insurance (SSDI) provides financial assistance for people with disabilities who are unable to work or to earn a sufficient amount. The program pays benefits to the claimant and in some cases family members, provided they are ‘insured’.
Disability benefits from the SSA are designed to provide support for individuals and their families who would otherwise be unable to support themselves. Anyone with an income that is deemed to be sufficient without the support, will not be able to receive it.
US inflation rate exceeds pre-year expectations
Phillip Lee Swagel, an American economist serving as the director of the Congressional Budget Office, has admitted that the United States appears very unlikely to meet the yearly projection of 4.2%. When pushed by Rep. Jason Smith he says that that inflation during the first months of 2022 were far higher than expected.
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Futures in natural gases soar
The huge increase in the price of gasoline in recent months has been attributed, at least in part, to the sanctions imposed on Russian fuel producers in response to the invasion of Ukraine. However the trade embargo also applies to Russia's huge supply of natural gas, strangling the supply in the United States. This has sent the price soaring and the value of natural gas futures has risen as a result.
New Jersey, New York "worst states to retire in"
New Jersey is the worst US state to retire in, according to a new ranking, with Mississippi and New York rounding out the bottom of the list.
The best state to retire was Florida, which ranked fourth for affordability and fifth for quality of life, although healthcare ranked 27th. Virginia, Colorado, Delaware and Minnesota rounded out the top five states to retire, boasting high affordability ratings, according to the survey by WalletHub per Bloomberg.
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Meteorologists are predicting a hotter and drier summer this year, thanks to the La Nina, which will also bring a similar weather pattern to Europe. La Nina, similar to the more common El Niño, is an oceanic and atmospheric phenomenon that can last up to five months. According to the National Oceanic and Atmospheric Administration (NOAA), a La Nina can bring stronger “trade winds [...] than usual, pushing more warm water toward Asia.”
US renews Chevron's Venezuela license
The US Treasury Department on Friday renewed a license to oil producer Chevron Corp to operate in US-sanctioned Venezuela through the end of November under the same restricted terms granted to the company since 2020.
Chevron has since March doubled down on efforts to negotiate expanded privileges in its license, mainly to receive billions of dollars of pending debt by trading cargoes of Venezuelan oil.
It also has sought unsuccessfully to gain some control of its joint ventures with Venezuelan state-run oil firm PDVSA.
The possibility of Venezuelan crude oil returning to the United States, once its largest single market, also had been discussed by US officials at a high-level meeting in Caracas in March.
Manchin could back climate provisions in slimmer spending bill
Key Senate Democrats are working to revive Joe Biden's legislative agenda with a current focus on energy, environment, climate and tax reform rather than the social safety net, according to three people familiar with the matter.
Plans to revive the "Build Back Better" legislation now revolve around talks between Senate Majority Leader Chuck Schumer and the key Democratic swing vote in the chamber, Senator Joe Manchin of West Virginia, the sources said.
Manchin, who stymied earlier attempts to pass the bill over concerns about the deficit and inflation, has signaled he could support some climate provisions in a trimmed down version of the bill, including a fee on emissions of the greenhouse gas methane and a carbon border tax, according to two of the people.
The lawmakers hope to resolve the talks on the legislation by the end of June before shifting focus to campaigning ahead of the November midterm elections for control of Congress.
Manchin's spokesperson, Sam Runyon, did not confirm the reporting, but said the senator "remains seriously concerned about the financial status of our country and believes fighting inflation by restoring fairness to our tax system and paying down our national debt must be our first priority."
Manchin has said publicly that the only deadline to pass a spending bill is 30 September.
Biden, facing political pressure near his lowest approval rating of his presidency, is eager to get any kind of deal done ahead of the elections to give Democrats something to tout as they seek votes.
AS USA takes a look back over the three federal stimulus checks sent out by the US government during the covid-19 pandemic.
How much? Who to? Any extra money for households with dependents?
High gas prices causes headaches for Memorial Day travellers
Every year the build up to Memorial Day weekend sees a huge spike in the number of people embarking on long-distance journeys to visit family and take advantage of the long weekend. But this year, the first free of most covid-19 restrictions since 2019, the high price of motor fuels is causing major issues.
The national average price of a gallon of gasoline is at an all-time high and states like California are suffering from extremely high gas prices.
Student debt plans move forward
President Biden’s pledge to cancel up to $10,000 in student loan debt for Americans may be getting closer. Although the specifics of who exactly would benefit from the action have not been presented, he has said that he’ll lay out his plan in a couple weeks.
There had been some speculation that there could be an announcement this weekend, though the shooting in Texas may have postponed the news.
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What is the solution for high gas prices?
The average price of a gallon of gasoline in the United States, as calculated by AAA, has risen to $4.601, representing an all-time high. The staggering increase in price over the past 12 months has caused serious problems for motorists all across the country, especially on a busy weekend of Memorial Day travel. To discuss what President Biden could do in response, former Sen. Judd Gregg (R-N.H.) and former Sen. Heidi Heitkamp (D-N.D.) spoke to CNBC's 'Squawk Box' to debate energy policy.
Should Congress impose a windfall tax to tackle high gas prices?
The high price of gasoline is a consequence of many factors, some of which are largely out of President Biden's control, but one area where many feel he is not doing enough is punishing some blatant profiteering from oil companies. As these figures from Public Citizen shows, some of the wealthiest companies in the world have boosted their bottom line in recent months, recording record high profits at a time when tens of millions of Americans are struggling to cover the cost of essentials.
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Social Security Disability Insurance (SSDI) provides financial assistance for people with disabilities, who are unable to work or to earn a sufficient amount. The program pays benefits to the claimant and in some cases family members, provided they are ‘insured’.
The ‘insured’ status is calculated based on the individual’s earnings history, requiring that people have contributed a certain amount to the Social Security Administration (SSA) during the course of their life.
Biden praises falling inflation rate
After months of sky-high inflation the first signs of a fall appear to have emerged after the year-on-year price increase for April fell slighty compared to the previous month. In the past 12 months the average price rise of around 6.2% was 0.1 percentage point less than had been recorded for March, something that President Biden has eager to celebrate.
He had been criticised widely by Republican lawmakers for failing to adequately address the inflationary pressures. The topic looks likely to be a key part of the 2022 midterms in November.
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"The report showed annual inflation declining and average monthly core inflation at around 4% at an annual rate, down from around 6% in the three months before it. At the same time, inflation is still too high and Putin’s price hike continues to impact food and energy prices."
"There is more work to do and tackling inflation is my top economic priority. My plan is to give The Federal Reserve the independence it needs to do its job, lower families’ costs, and lower the federal deficit."
The sharp price rises experience in recent months has pushed some states to introducing financial relief programs for consumers. Pennsylvania Governor Tom Wolf has proposed a “$1.7 billion plan to help the state fully recover from the pandemic and pave the way for a successful future” in February.
Part of his proposal included $500 million for the PA Opportunity Program, which would send households in the Keystone State with an income of $80,000 or less a direct payment for up to $2,000.
Are high gas prices affecting Trump's rally attendances?
In recent months the average price of a gallon of gasoline has soared across the country, with some states now recording prices well in excess of $6. On Saturday AAA confirmed that the average price in the US had risen to $4.601, hitting consumers in the pockets on a travel-heavy Memorial Day weekend.
However the high cost of motor fuel may also be having a knock-on effect for former President Trump, whose widely-attended rallies have been a key part of election campaigns. The BBC's North America correspondent Anthony Zurcher has suggested that, given the huge distances supporters travel to see Trump, the high gas prices could be to blame for some underwhelming recent turnouts.
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Good morning and welcome to AS USA
Welcome to our dedicated financial news live feed, bringing you all the latest from the United States on Sunday, 29 May.