USA finance and payments news summary: 2 June 2022
Headlines: 2 June 2022
- May unemployment numbers to be released Friday 3 June
- New York Stategas tax holiday goes into effect Wednesday and will end in December 2022
- Fed Chair and President to met at White House to discuss inflation on Tuesday
- US gas price jumps to record high on Thursday at $4.715 per gallon on average
- No announcement yet amid speculation Biden could announce large-scale student debt forgiveness
- Personal consumption price index shows inflation slowed slightly in April
- Online searches for baby formula soar as shortages continue
Helpful info & links
- California State Disability Insurance scheme: the lowdown
- Governor Newsom proposing $400 rebate for California car owners
- Pennsylvania governor wants to send residents $2,000 stimulus check
- Which states in the US spend the the most on Medicaid?
- New York unemployment benefits: what is the maximum?
- Things to consider before retiring
More AS USA related articles:
New data released by mortgage giants Freddie Mac has found that mortgage rates in the United States dipped for a second consecutive week, slowing alongside consumer spending. The recent dip could simply be a readjustment of months of growth, but experts are pointing to other factors.
“Mortgage rates decreased for the second week in a row due to multiple headwinds that the economy is facing,” said Sam Khater, Freddie Mac’s chief economist. “Despite the recent moderation in rates, the housing market has clearly slowed, and the deceleration is spreading to other segments of the economy, such as consumer spending on durable goods.”
A report released on Thursday revealed that job growth in the United States is beginning to slow after a period of rapid growth as the nation recovers from covid-19. This is expected to see mortgage rates hold steady, or even fall slightly, in the coming weeks.
This could make it an appealing time to take out a mortgage and many prospective home-owners are expected to do so as we enter the summer months, when there is often an uptick in home purchases. We take a look at the types of mortgage that could be best for you...
Biden outlines plan to address high inflation
High prices across the board are causing major problems for Americans currently, and look set to be a mahor issue for President Biden ahead of the November midterms. The President has been under pressure to bring the sky-high inflation rate under control, although the United States did record a slight decrease in the April inflation report.
Inflation has been a problem for the US economy for nearly a whole year. The inflation rate in February of 2021 was 1.7 percent, just under the Federal Reserves 2 percent target. However, from April 2021 inflation began to take a sharp rise to 4.2 percent, so far at 8.5 percent in June 2022.
The Biden adminsitration has been criticised for the problem, which threatens to derail recovery from the pandemic. Furthermore, him and his team have drawn criticism for comments they made last year about inflation.
Gas prices cause problems all around the world
Consumers in the United States are suffering the consequences of price rises and the sanctions on Russia, which have combined to push fuel prices to record levels. But it's not just in the US that these pressures are being felt and governments all around the world are scrambling to address the high prices.
"Now we have an oil crisis, a gas crisis and an electricity crisis at the same time," said Fatih Birol, head of the International Energy Agency watchdog group. "This energy crisis is much bigger than the oil crises of the 1970s and 1980s. And it will probably last longer."
President Biden informs public about imports of baby formula to combat shortage
Today, President Biden is announcing that his Administration is sourcing two flights, facilitated by the U.S. Department of Health and Human Services (HHS), for Operation Fly Formula to transport Bubs Australia infant formulas from Melbourne, Australia to Pennsylvania and California on June 9 and June 11 respectively. This delivery will include 380,000 pounds of Bubs Australia infant formula, approximately 4.6 million 8-ounce bottles. Additional deliveries of Bubs Australia Infant formula will be announced in the coming days.
In the United States, diesel prices are on average $2.36 higher than they were a year ago. While in Europe, diesel is typically cheaper than regular gasoline, which is not the case in the US. The EIA explained this difference in price by showing that tax benefits that made gasoline more competitive in the market helped decrease demand for diesel starting in the early 2000s.
The price of diesel is highly dependent on the price of crude oil as that cost has represented around fifty percent of “diesel fuel prices from 2000 through 2021.”
Overnight record average fuel price in Texas
The average price for a gallon of fuel is Texas stands at Texas $4.341. One year ago, the average price was $2.675.
Prices have been rising since the turn of the year. According to the AAA, the average price for a gallon of fuel was $3.28 in January. While it had been rising after the lows of the pandemic, the Russian war in Ukraine has caused a huge surge in prices.
If you are receiving benefits, the Social Security Administration will automatically sign you up at age 65 for parts A and B of Medicare. At the beginning of your initial enrollment period (IEP), three months before your 65th birthday, Social Security will send you instructions in the post.
Entitlement programs are designed to offer a safety net of support mechanisms to ensure that people in the United States are protected financially. The programs are essentially rights granted to American citizens, and to certain non-citizens, by federal law.
Medicare is one of the best-known entitlement programs in the US, but there are many more. Federal initiatives like Medicaid, Social Security, unemployment benefits, and a suite of welfare programs are also entitlement programs.
What have officials said about the plan?
We’ve got the largest and most extensive rail network in the world here in the US and Americans deserve world class rail service to go with it.
This allows trains to go faster and to get goods to market safer and cheaper... [it will be] better for the environment.
Expansions to last year's infrastructure bill
The Biden administration on Thursday announced over $368 million in grants to improve rail infrastructure in states including Georgia, Maryland, North Carolina, Kansas, Florida and Michigan.
Despite positive unemployment figures and the end of nearly every pandemic restriction, the US economy is 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.
Many experts are predicting a recession.
Biden's three-part plan to tackle inflation
Americans perception of President Biden's job performance has been taking a beating as household finances struggle to make ends meet due to inflation not seen in four decades. To show that he hears their concerns, Biden laid out a three-part plan to tackle inflation.
First of all, he's acknowledging that it's the Fed's job to bring down inflation and that he doesn't plan to get in the way of the central bank's policymakers.
Secondly, he will continue to work to make goods more affordable, focusing on high gas prices which hit $4.62 on average across the US on Tuesday.
Thirdly, he plans to reduce the federal budget through common-sense reforms to the tax code. “With the right policies, the US can transition from recovery to stable, steady growth and bring down inflation without giving up all these historic gains,” Biden wrote.
The Washington Post published an article on May 27 detailing the Biden administration’s plan regarding student debt. According to three people familiar with the situation, there will be an upcoming announcement that the president will forgive $10,000 in debt for graduates earning under a certain limit.
Millions of borrowers at risk of student loan default when federal moratorium ends
Student loans payments and interest have been frozen since March 2020 giving breathing room to millions of borrowers. The lastest extension of the moratorium will end 1 September when roughly 40 million borrowers will need to restart payments.
Roughly twenty-five percent of those borrowers were in deliquency or default when the pause was put into place. Rohit Chopra, head of the Consumer Financial Protection Bureau is worried that even more may be at risk come September. Currently, his agency is awaiting a decision on student debt cancelation that has been parsed by the Biden administration.
New York is joining a growing list of states that have decided to give motorists some relief by dropping the state’s levy on motor fuels. Governor Kathy Hochul announced in April that the state would cut its tax on regular gas and diesel as part of the state budget.
The measure will go from 1 June through to the end of the year with separate tax relief being implemented in some local jurisdictions.
Large and SUV electric vehicles reach price parity in the US
One of the factors that has deterred American consumers from purchasing electric vehicles has been the cost. However, as more manufacturers roll out their own EVs the price has been coming down reaching price parity with efficient internal combustion engine vehicles in Europe, Australia and the US for large cars. All electric SUVs have done the same in the last two markets.
It's expected that EVs will reach price parity in all major markets by 2024 at which point "everything in the city will change," according to Alvaro Rodriguez, Spain public affairs director of electric scooters manufacturer VOI. By 2040 he believes the number of EVs on the road will rise from 7 million currently to around 550 million globally.
The rising number of EVs will have a knock-on effect with battery scrap industry in 10 years' time, the typical lifespan. One factor that will need to be overcome though is the current lack of harmonization between different parts of the EVs and batteries industry to reclaim the cobalt, graphite, lithium, manganese and nickel that EV batteries may contain.
Survey paints a bleak picture for gig work conditions
The Economic Policy Institute released findings from a recent survey on the working conditions for gig workers. The research carried out in the spring of 2020 paints a poor picture of their earnings even relative to other service workers who typically receive low pay.
Nearly 30 percent earned less than the minimum wage in their state. Around 14 percent received less than the federal minimum wage which has been $7.25 per hour since 2009. This has resulted in almost a fifth going hungry and 30 percent having to rely on government aid to put food on the table. Over 30 percent said that they weren't able to pay the full amount of their utility bills.
Almost two thirds reported losing income due to technical difficulties with the platforms system for clocking in and out. That's a rate over three times reported by regular wage employees.
US finance news, live updates: welcome
Good morning and welcome to AS USA's daily live blog for Thursday 2 June 2022, bringing you the latest financial news in the United States.