USA finance and payments: summary news | 14 June
US Finance News: Live Updates
Headlines: 14 June 2022
- Real wages decreased 0.6 percent while inflation led to an average price increase of one percent across the market in May.
- The price of a barrel of crude oil increases to 121.78, a 61 percent increase since January.
- Bitcoindrops under $24,000
- 'Shrinkflation' reduces product sizes for consumers
Helpful links & Information
- Gas prices in US: Are gas prices more expensive in other countries?
- When will President Bidenmake a decision over student loanforgiveness.
- Do I have to pay taxes on Social Security benefits? How much?
Related News from AS USA:
The Fed and the White House were trying to avoid the kind of long slog, decade-long recovery that there was after the Great Recession. For some people, there was a certain complacency about inflation as a possibility. That’s probably true too. But that was viewed as a much more remote tail risk.
Inflation wasn’t transitory because covid-19 was not transitory. Parts of China are still locked down. We’re not even through the covid-19 shock... When the Fed lowers inflation, it does it by reducing people’s ability to spend. It’s not a happy way that we get inflation down. The Fed’s lever is impoverishing people. Hardship in the United States is never equally shared.
Biden approval ratings still low as inflation bites
Despite positive news in many aspects of the economy, one major problem still persists. It's inflation, and it could bring an ubrupt halt to any Democrat legislative plan for the next two years if it causes defeat in the November 2022 elections.
Consumer prices rose 1 percent in May alone and by 8.6 percent over the past 12 months, according to data released Friday by the Labor Department. While unemployment may be low, inflation is still killing Americans in shops, at fuel stations, and anywhere else they can spend money.
Each individual has a ‘full retirement age’, which can vary based on the year in which they were born. Regardless of your full retirement age you can start receiving Social Security retirement benefits at 62, but opting to defer the payments will bag you a larger monthly payment when you do decide to claim the support.
Once you reach 70 years old, the monthly payment stays the same. With this in mind you should try to hold off from claiming Social Security retirement benefits for as long as possible, up to the age of 70 if it is possible.
While Americans pay more to fill up their gas tanks, Big Oil companies are raking in record profits, rewarding their CEOs and wealthy shareholders with massive stock buybacks, and using special loopholes in the tax code to pay next to nothing in taxes.
New plans to try and alleviate inflation
Senate Finance Committee chair Ron Wyden is planning to introduce a tax on "excessive" oil company profits in a bid to bring down inflatiob.
The bill applies a 21 percent additional tax on the excess profits of oil and gas companies with more than $1 billion in annual revenue, the aide said. The 21 percent tax would be in addition to any regular income tax due.
A UK-based cryptocurrency bank, Celsius Network, was forced to temporarily halt all withdrawals, transfers and crypto swaps due to what the company described as “extreme market conditions.”
Celsius has 1.7 million customers and around $3.7 billion in assets but is suffering from a decline in confidence in cryptocurrency which has been seen right across the industry in recent weeks.
Pain at the pump hits American households
It's no secret that the price of gasoline has soared in 2022, fuelled by rampant high inflation and a serious supply chain issue that is preventing producers from keeping up with demand. In recent days the average price of a gallon of gasoline has exceeded $5 for the first time in US history, while some states like California are recording prices above $6.
To understand how these price rises are affect normal families, and why it could be a key issue in the midterm elections, NBC News follows three families to see how their spending habits have changed.
What's next for Bitcoin prices?
Crpytocurrency Bitcoin has had a difficult 2022 and there appears to end in sight for investors who will hope for an uptick in fortunes. In the past five days alone the coin's dollar-value has slumped by 29% and now sits below $23,000. Throughout much of the pandemic the value of Bitcoin soared with more at-home investors ploughing stimulus money into the commodity. However since the all-time high in November last year, when it traded at around $69,000, its value has fallen by 67%.
Germany records historic inflation high
The United States is far from the only nation suffering from the long-term consequences of covid-19 and struggling to steer the economy back to pre-pandemic levels. Germany has enjoyed significant economic growth over the past year as businesses and institutions have been able to reopen. Unfortunately, and as is also the case in the US, this effort has served to push up prices across the board and left the nation with an historically high rate of inflation.
While some forms of Social Security benefits are set by the federal government, Social Security disability payments (SSDI) vary for each individual and are calculated in a similar fashion to retirement benefits. The SSA looks at your earnings during the years from the time you turn 22 up to the year before you become disabled. In order to get disability benefits you must meet the strict definition that is established by law.
Did stimulus spending fuel high inflation?
Some of President Biden's opponents in Congres have argued that his American Rescue Plan (ARP), the $1.9 trillion package passed in early 2021, may have exacerbated inflationary pressures. The package was designed to provide fresh impetus to the US economy as it sought to recovery from the pandemic shutdown, however there are accusations that the size of the ARP overheated the economy.
Last week we were writing about a sudden rise in the value of Bitcoin. It had risen to $30,000 from around $27,000 in May. However, the fickle nature of cryptocurrency markets has been once again proven.
Investors in cryptocurrency enjoyed staggering growth for much of 2020 and 2021 but this year the market has snapped back with avengence and wiped out the gains made by many individual investors. We take a look at what is next for Bitcoin...
"One of the key ways to fight inflation is by lowering the cost of moving goods through the supply chain.
When I first started talking about the supply chain, when I came here well over a year ago, the American people understandably wondered, “Supply chain — what…” — I mean, that’s not a usual part of their jargon every day. But they understand it fully now. They understand it.
If you can’t get the material needed to build a product you’re building — whether it’s an automobile or whatever it is — it makes it difficult to be able to move, and that’s called the supply chain. That’s why I’ve been focused on ports."
"Last fall, ports around the world were congested due to disruption caused by the pandemic, so we brought together port operators, shipping companies, and labor and — to ease the bottlenecks. And as a result, over the holidays last, 97 percent of all the packages were delivered on time and on shelves when you went Christmas shopping."
California reels from high gasoline prices
Last week the nationwide average price of a gallon of gasoline exceeded $5 for the first time in the United States, but the Golden State is suffering from the price rises more than most. Across California the average price has topped $6.40, due in large part to the state's high rate of fuel tax. The higher tax rate is designed to address very real concerns about climate change, but lawmakers may begin to consider suspending the state's tax fuel tax to provide a short-term solution.
The consumer price index (CPI) is a measures of goods and services prices in the United States, used to calculate how fast prices are rising for consumers. Last week the Labor Department 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.
But the rate of increase is not even across the board, and certain types of products have recorded much higher price rises. We take a look at some of the sectors most affected by inflation...
Unemployment claims inch upward
The Department of Labor has reported that for the week ending on 4 June, initial claims reached "229,000, an increase of 27,000 from the previous week's revised level."
States that saw the greatest increase in intital claims were Mississippi (+1,935), California (+1,911), New York (+1,054), Oklahoma (+753), and Michigan (+582). The largest decreases were tracked in in Kentucky (-3,523), Pennsylvania (-2,127), Georgia (-1,762), Florida (-1,520), and Indiana (-426).
While initial claims have increased, the number of total claims has continued to decrease. The total number of claims made during the week ending on 28 May was 1,306,000. This is down from 1,343,000, the total for the week ending on 14 May.
Read the full report here.
Treasury Secretary Janet Yellen speaks to Congress on how the department is combatting inflation
Late last week, Sec. Janet Yellen spoke with Congress on efforts to support lower income households as inflation increases rapidly. The BLS has reported that groceries have increased 11.9 percent over the last year. Since January average prices for food have increased one percent or more.
Many households are also struggling to keep up with energy costs which since the Russian invasion of Ukraine have increased dramatically. Fuel oils saw an increase of over 100 percent in May, a BLS record. Electricity prices grew by 12 percent, and combined with other costs have begun to seriously impact purchasing power.
How to access your Social Security benefit verification letter
The Social Security Administration (SSA) oversees a broad range of financial support programs and keeping tabs on your benefits can seem a little overwhelming sometimes. However the SSA's My Social Security online portal allows recipients to keep track of their benefits payments and view their own earnings history. If you need to find your benefits verification letter you will be able to access a copy on you online account.
What is a bear market? Is the stock market moving that way?
Bear markets, according to the Wall Street Journal are an indicator that markets have fallen significantly from highs seen previously. The technical definition is a period where stocks lose twenty-percent of their value from a recent high.
This may lead to massive sell offs as investors begin to worry about a recession. However, what many experts recommend is staying calm and not making "sudden movements" like massive sell offs. High inflation may also be worrying investors who believe that there are signs in the economy that are pointing towards a recession.
To combat the bear market, the Federal Reserve will continue to raise interest rates in an attempt to slow the transfer of money through the economy. This is the financial equivalent of pouring cold water on embers to stop them from turning into a fire.
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. Never that many jobs in that period of time. (Applause.)
Unemployment rate is near historic lows. Millions of Americans are moving up to better jobs and better pay.
Less than a week ago, we were writing about a sudden rise in the value of Bitcoin. It had risen to $30,000 from around $27,000 in May. However, the fickle nature of cryptocurrency markets has been once again proven. The value has sunk to under $24,000, its lowest value in two years, including a staggering 14 percent drop in the last 24 hours.
Welcome to AS USA's live blog following financial and economic news in the United States.
Markets have take a tumble in recent weeks as inflation continues and commodity markets see a rapid rise in prices. Much of these fluctuations are a result of the Russian invasion of Ukraine which has upended energy and food markets.
The Consumer Price Index saw an increase of one percent in May. This is the second highest figure tracked this year. Fuel oils increased by more than 106 percent which drove up the market average quite significantly.
Several states have or are planning to offer citizens financial relief as gas prices continue to break records. Others have enacted gas tax holidays to temporarily remove state fuel taxes to reduce costs for consumers.