USA finance and payments: summary news | 9 June
US finance: live updates
Headlines: 9 June 2022
- Average US gas price reaches $4.97 per gallon, with experts predicting a $6 average later this year. Where are the highest and lowest prices?
- Secretary Yellen urges Congress to approve $80bn for IRS to chase tax cheats, reduce backlog
- Select Massachusetts residents to receive $500 direct payment
- Tesla boss Elon Musk backtracks on job cuts after saying that 10% of workers would be laid off
- Federal Reserve expected to address 40-year-highs in inflation with interest rate hikes
- North Carolina lawmakers propose a $200 tax refund for drivers
- Unemployment falls to lowest rate since 1969, May jobs report shows
- Treasury Secretary Yellen says she was "wrong" about the path of inflation
Helpful info & links
- A few helpful tips for saving money
- California State Disability Insurance scheme: the lowdown
- Why are mortgage rates beginning to decrease in the US?
- Pennsylvania governor wants to send residents $2,000 stimulus check
- North Carolina Democrats propose $200 gas tax rebate
More AS USA related articles:
US household wealth decreases for first time in 2 years despite home value gains
Despite the dramatic growth in housing prices, the losses in the stock market resulted in a net negative for US household wealth in the first quarter on 2022. This is the first drop since the first quarter of 2020 when the US economy was battered by the effects of the covid-19 pandemic.
The Fed's quarterly snapshot of the national balance sheet recorded household new worth dipped to $149.3 trillion from a record $149.8 trillion at the end of last year.
However, household balance sheets overall remained healthy some $32.5 trillion above pre-pandemic levels. The decline is not expected to dampen strong consumer spending even with high inflation.
Shrinkflation is ballooning as prices rise their fastest in four decades
You might not have noticed but the products you buy are getting smaller as companies try to avoid raising sticker prices due to inflation. The concept known as "shrinkflation" is nothing new but has accelerated in recent months with rising prices.
"Since most shoppers don’t pay attention to the net weight or net count disclosure on packages, manufacturers can pass on a sneaky price increase without much notice by just making their products a little smaller," says Edgar Dworsky aka MrConsumer on his Consumer World website.
Americans more concerned about price of food than gas prices
The Harris Poll conducted a survey in two phases of more than 2,000 American adults about their concerns over inflation and how it is affecting their shopping habits.
The results from March found that Ameircans were more concerned about the price of gas than food and other discretionary spending.
However, worries about the cost of putting food on the table trumped gas prices when respondents were asked again in May, now a concern for 90 percent of Americans.
LNG plant fire in Texas causes futures of natural gas prices to soar in Europe
Europe's efforts to wean itself off Russian natural gas over Putin's invasion of neighboring Ukraine was dealt a major blow on Thursday. A fire at Freeport LNG, one of the world's biggest suppliers of liquefied natural gas, is expected to disrupt production into next month as Europe tries to build up stocks in preparation for next winter.
The US is the world's largest supplier of LNG suppling around a fifth of worldwide exports and the Freeport facility makes up 18 percent of US exports. The cause of the fire is under investigation.
Some people will need to pay federal income tax on Social Security benefits. There is a limit of your combined income, and those with a combined income under $25,000 ($32,000 for married couples) a year will not have to pay taxes on their Social Security benefits.
However, for individuals and married couples earning above this threshold you will more than likely have to pay some tax.
What are analysts saying about the price of fuel?
It’s been one kink after another this year, and worst of all, demand doesn’t seem to be responding to the surge in gas prices, meaning there is a high probability that prices could go even higher in the weeks ahead.
People are still fueling up, despite these high prices. At some point, drivers may change their daily driving habits or lifestyle due to these high prices, but we are not there yet.
New records for fuel prices as $5 a gallon topped
For the first time ever, the national average price of gas has topped $5 per gallon. This is according to data analysts at GasBuddy, though the AAA has the average at a slightly lower, though no less scary, $4.97 per gallon.
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With the inflation crisis biting purse strings up and down the land, many people who had previously retired may be thinking about rejoining the workforce to keep their head above water. While not necessarily good news, considering the circumstances, it is possible for seniors to work and receive their Social Security benefits.
What has Bernie Sanders said about the upcoming elections?
The Republicans stand an excellent chance of gaining control of the House and quite possibly the Senate... Two corporate Democrats, Sens. Manchin and Sen. Sinema, sabotaged [Build Back Better] and it has been downhill ever since for the Democratic Party.
You really can’t win an election with a bumper sticker that says: ‘Well, we can’t do much, but the other side is worse.'
Social Security plans could face Senate
Senator Bernie Sanders has been challenged to bring forth his plans to expand Social Security support. However, the split Senate means it is unlikely anything will be passed.
Back in March Mitt Romney proposed reducing the support available for younger retirees. Most recently, House Republicans proposed raising the eligibility age for Medicare from 65 to 69 and social security from 67 to 69.
Can the economy be turned around before the election in November?
Apoll published on Wednesday by Morning Consult found that 58 percent of those surveyed disapprove of Biden’s performance as president, while 39 percent of respondents approve.
In a poll from May, the same group found that 42 of respondents approved of his presidency. With trouble ahead with continued inflation, it can be expected that this number will continue to drop. It is also worse than Donald Trump's ratings at the same stage of his presidency.
World Bank warns of serious threat to the global economy
The World Bank has slashed its global growth forecast, warning that Russia’s invasion of Ukraine has compounded the damage from the covid-19 pandemic and could push many countries into recession.
In its Global Economic Prospects report, the World Bank cut its forecast for world GDP growth this year to 2.9%, from 4.1% previously, and warned there is a considerable danger of stagflation.
Experts predict continued inflation
Speaking to CNBC's Closing Bell, Brian Belski, BMO Capital Markets chief investment strategist, explains how the Federal Reserve's rate hikes could affect the continued high rate of inflation. Price rises have hurt consumers in the US, and with wages unlikely to increase in line with inflation many workers will find themselves out of pocket.
The average price of a gallon of gas in the US has hit $4.95 for Regular, $5.30 for Mid-Grade, $5.59 Premium, and $5.71 for Diesel. Up almost $2.00 across the board compared to prices paid at the pump last year.
The state paying the highest for a gallon of regular gasoline is California where the gallon has reached $6.39. Governor Gavin Newsom has proposed a gas stimulus check or rebate for up two cars per household to offset costs for residents. Drivers will be able to receive $400 per vehicle.
$5 national gasoline average is just around the corner
On Wednesday, 8 June the AAA calculated that the average price of a gallon of gasoline in the United States had reached $4.955, once again breaking the all-time record. Just one year ago the average price was just over $3 per gallon, but a confluence of factor in the last 12 months have conspired to send the price skywards. Experts have been predicting a $5 national average for weeks, but it looks like we are finally on the cusp of that bleak milestone.
Despite positive unemployment figures and the end of nearly every pandemic restriction, the US economy could be headed for the rocks. Inflation, currently standing at 8.3 percent year-on-year, is threatening to pull the plug on economic progress. Prices for some of the most neccessary commodities are at record levels, such as fuel and grain, without a clear end date for when things may get better.
Chance of a recession is a coinflip says Nobel laureate and economist
Robert Shiller, Nobel laureate and economist, said there is a "good chance" of the US entering a recession. He told Bloomberg Wednesday that the odds of a recession in the next few years are basically a cointoss. The 50 percent chance is "much higher than normal" and is at least in part the result of a "self-fulfilling prophecy" as worries about a downturn increase among investors, companies and consumers.
Yellen says Child Tax Credit had nothing to do with inflation
Treasury Secretary Janet Yellen addressed concerns about inflation when she spoke to the Senate Finance Committee this week. She repeatedly rejected Republican assertions that the highest inflation in four decades has been driven by Biden's $1.9 trillion American Rescue Plan.
"We're seeing high inflation in almost all of the developed countries around the world. And they have very different fiscal policies. So it can't be the case that the bulk of the inflation that we're experiencing reflects the impact of the ARP," she told the committee.
When asked about the Child Tax Credit payments made last year, she said they were a relatively small expenditure and "utterly nothing" to do with boosting inflation. Yellen repeated that inflation was being fueled by persistent supply chain disruptions and new covid-19 variants, along with high energy and food prices caused by Russia's war in Ukraine.
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We'll have all the latest news on the high rate of inflation and continued gasoline price rices, as well as updates on all financial news from the United States.