USA finance and payments news summary | 11 June 2022
Headlines: 11 June 2022
- The price of fuel oils, including diesel, shot up 106 percent from April to May, shattering records.
- Average price of gasoline in the United States tops $5 per gallon, up nearly 50% in the last year
- US stocks suffer worst week since January as inflation hits 40-year high
- Consumer Price Index increased 1 percent in May, a sign that inflation is still taking hold across the US economy.
- Gas prices are increasing globally, how do prices in the US compare to those paid in other countries?
- Bitcoin sees one of its better weeks this year: what caused the increase?
Helpful information and Links
- Experts respond to the question on the minds of many: how high may gas prices go?
- Taxes and Social Security: How much do those receiving benefits need to pay?
- Can those on Social Security continue to work?
Read more from AS USA:
President Biden responds to inflation
My Administration will continue to do everything we can to lower prices for the American people. Congress must act urgently as well. I call on Congress to pass a bill to cut shipping costs this month, and get it to my desk, so we can lower the price of goods. And, I call on Congress to pass legislation to cut costs for families like energy bills and prescription drugs. The deficit has come down more under my watch as President than at any time in history, but if Congress would pass tax reform to make the wealthiest Americans and big corporations pay their fair share, we could reduce this inflationary pressure even more. These are the most significant things Congress can do to help families now and complement the Federal Reserve’s efforts to bring inflation down.
Prices at the pump are a major part of inflation, and the war in Ukraine is a major cause of that. The United States is on track to produce a record amount of oil next year, and I am working with the industry to accelerate this output. But it is also important that the oil and gas and refining industries in this country not use the challenge created by the war in Ukraine as a reason to make things worse for families with excessive profit taking or price hikes.
The Labor Department has published the consumer price index for May 2022, which showed that the annualised rate of inflation in the United States had risen to 8.6% year-on-year.
The consumer price index (CPI) is a measures of goods and services prices and is used to calculate rising costs. The core CPI, which excludes volatile factors like food and energy, was also a very high 6%.
Biden promises action on high inflation rate
Look, folks, today I’d like to speak about my top economic priority: fighting inflation. I understand Americans are anxious, and they’re anxious with good reason. I was raised in a household when the price of gasoline rose precipitously, it was the discussion at the table. It made a difference when food prices went up.
But we’ve never seen anything like Putin’s tax on both food and gas.
Americans should also understand our economy has unique strengths that we can build on. The job market is the strongest it’s been since World War Two, notwithstanding the inflation. We added another 390,000 jobs last month; 8,700,000 new jobs since I took office. An all-time record.
Social Security payments don’t just cover seniors, they cover the disabled as well. Both the Supplementary Security Income (SSI) and the Social Security Disability Insurance (SSDI) payments can be attained by having a disability, but both have different requirements.
The SSI is the simpler to attain, being designed to provide financial assistance for seniors or people with disabilities who have a limited income. Most states have their own support programs to assist people on SSI benefits.
Gas prices exceed $5 for the first time
While rising before the war in Ukraine, the Russian invasion has turned commodity prices upside down, especially for those nations that are sanctioning them. On Friday, the Department of Labor published its latest inflation figures for the month of May, with the Consumer Price Index (CPI) rising by a whole percent in a single month.
One of the sectors most affected by the price rise has been the fuel industry, with huge increases to the cost of gasoline. The average price across the United States is now $5.004, a record high.
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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.
A potential long-term benefit of working while receiving retirement support is that it could change the size of your benefit. The Social Security Administration (SSA) will calculate each individual’s average indexed monthly earnings across the 35 highest-earning years.
What products have had the highest price rises this year?
The high rate of inflation over the past 12 months has pushed up prices across the board, and devalued wages for millions of Americans. It is little surprise that fuels and oil-based products have recorded the fastest growth in the last year, with a 48% increase to the average price of gasoline.
Gas prices rises could present a major problem for Biden in the midterms
It is fairly common for the party in government to suffer a few losses in the midterm elections, but this year's elections could be disastrous for President Biden unless his administration can address the high price of gasoline. Throughout his time in the White House Biden's approval ratings have been closely tied to the price of fuel, with expensive gas prices bringing down his rating. Experts on CNBC have predicted a painful midterm elections for the Democrats if the prices remain high.
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 those who are taxed, the exact rate of tax you are required to pay is based on a variety of factors related to yur earnings history and personal circumstances.
Here's everything you need to know...
$5 per gallon gasoline is now the national average
After months of almost unfettered price rises the average cost of a gallon of gasoline has now topped $5 for the first time in US history. A confluence of factrs have conspired to push the price of motor fuels skywards, leaving consumers to suffer with the high prices. It is not only motorists who have been affected by the rises; the cost of almost all goods is likely to be affected because of the increased cost of transportation.
GOP congressional caucus proposes deficit reduction plan
The Republican Study Committee (RSC), the largest conservative caucus in the House, on Thursday released its annual model federal budget proposal. They say it will take 7 years to balance the federal budget. Dubbed the "Blueprint to save America," would cut federal spending by $16.6 trillion.
Incredibly, though perhaps not surprising for a conservative group, those cuts would not include military spending, which would be boosted by 5 percent. It also prevents funding to abortion rights groups and includes more than 30 anti-abortion measures. It lists eight bills aimed at barring principles based on “critical race theory”, though this conservative bogeyman has not been proven to exist and is wielded to attack re-evaluations of American history.
Experts predicts little respite from high inflation rates
There's little respite from four-decade high inflation until energy and food costs simmer down and excess demand pressures abate in response to tighter monetary policy. The Fed might still raise policy rates 'just' 50 basis points next week, but it could easily ratchet up the pace beyond then if inflation keeps surprising to the high side.
The price of gas in the US has topped the $5 mark after months of constant rises. That figure that is proving incredibly costly for American families and represents an almost $2 average increase on the cost of a gallon of gas a year ago.
According to the International Energy Agency, total demand is estimated to rise by 1.3% by the end of 2022, while supply continues to dwindle largely due to the Russian invasion of Ukraine and the sanctions imposed on the Kremlin by the international community, many of which have targeted the vast energy resources available to Vladimir Putin.
Tesla stock slumps as major recall edges closer
The National Highway Traffic Safety Administration has expanded its probe into Tesla's "Autopilot" system. The investigation was begun in August 2021 after identifying 11 crashes involving a first responder vehicle and Elon Musk's electric vehicles where the autopilot system was engaged.
NHTSA is trying to determine if the autopilot and associated Tesla systems may exacerbate human factors or behavioral safety risks by undermining the effectiveness of the driver's supervision. The wider scope of the investigation could lead to a potential recall of a controversial feature closer which is used by over 800,000 customers.
US records a 1% price increase in a single month
The one percent increase in the CPI is the second largest increase recorded in decades. Only the March bump in prices of 1.2 percent surpasses those seen in May over the last year.
Fuel oils, which include products such as "diesel, heating oil, and various other residual fuel oils," increased by over 106 percent. According to the BLS, this rapid increase in price over a one month period, "represents the largest increase in the history of the series, which dates to 1935."
1. Fuel oil: +106%
2. Energy commodities: +50.%
3. Gasoline (all types): +48.7%
4. Used cars and trucks: +16.1%
5. Food away from home: 11.9%
Welcome to AS USA
Good morning and welcome to our dedicated financial news live feed, bringing you the latest from the United States as the average price of gasoline tops $5 per gallon for the first time.