USA finance and payments: summary 19 June
US Finance News: Latest Updates
Headlines: 19 June 2022
- Democrats introduce bill to shore up Social Security, increase benefits by $200 per month.
- Experts, including Fed Chairmen Jerome Powell, expect further interest rate increases in 2022.
- The price of one Bitcoin closed under $20,000 on Friday.
- The price of an average gallon of gas in the US dipped below $5 for first time in a week on Saturday.
- Fed outlines reasons for 0.75 percentage point hike for interest rates - why have they increased rates?
- Wall Street has worst week since March 2020, S&P 500 entered bear market territory.
- Elon Musk faces $258bn lawsuits for alleged Dogecoin "pyramid scheme"
- 'Shrinkflation' reduces product sizes for consumers
Helpful links & Information
- When will theSocial Security COLA for 2023 be announced?
- Gas prices in US: which countries have the most expensive gasoline?
- When will President Biden make a decision over student loan forgiveness
- Do I have to pay taxes on Social Security benefits? How much?
- 30-year fixed-rate mortgage interest rates hit 5.78%, the highest level since late 2008. When will home loan rates fall?
Related News from AS USA:
US Economy continues to feel impacts of covid-19 in the labor market
The Bureau of Labor Statistics has released a new blog detailing the progress the US economy has made since the covid-19 pandemic began. While, the recovery has been strong there are still impacts on the labor market being felt.
Although the unemployment rate has fallen below the levels seen before the pandemic, labor force participation is still down compared to 2019 figures. By the end of 2021, around 155 million people were working. This is still down from the 158 million that were working in 2019. As it relates to unemployment, there were still 900,000 more people who were looking for a job and could not find one, compared to 2019.
Initital unemployment claims drop by 3,000 to 229,000
Last week the US Department of Labor reported that for the week endind on June 11, 229,000 initial unemployment claims were made. Intital cliams have crept up in recent weeks but the most recent reported a decrease of 3,000.
States with the highest number of new claims for the week ending on 4 June, were Florida (+2,098), Georgia (+2,060), Pennsylvania (+1,134), Missouri (+1,053), and Illinois (+827). On the other hand, the greatest decreases were tracked in Michigan (-2,131), Mississippi (-1,723), New York (-631), Oklahoma (-598), and New Jersey (-440).
Read the full report.
Inflation is beginning to impact the wallets of many across the country, but seniors, many of whom are on a fixed income, are really struggling to keep up. Twenty-three percent of people over sixty-five reported difficulty covering basic household expenses in May. This is up from sixteen percent during the same period last year.
The Social Security Administration will announce next year’s COLA in October, and the amount will be applied to benefits beginning in January 2023. Based on current inflation trends, the SCL has estimated that next year’s COLA could reach 8.3 percent, surpassing the historic 5.9 percent increase announced last year.
Still haven't filed a 2021 tax return? IRS wants you to get it in ASAP to avoid penalties
The majority of taxpayers managed to file their 2021 tax returns on time, but there were a fair number of filers who still need to turn in their tax declaration. The IRS advises to get your tax filing in as soon as possible, not only to receive your tax refund but to avoid any potential late penalties.
That is especially true for taxpayers that have an outstanding bill with Uncle Sam. Even if you file on time or requested a six-month extension, interest and penalties start to accrue from the tax deadline, which was 18 April in 2022.
As time passes, needs can change from where you live, how you get around to what you eat. The healthcare coverage you have is no different. Once a year, during the nine weeks of Open Enrollment for Medicare all those who are signed up can make changes to their plan for healthcare and prescription drugs for the next year.
Here's everything you need to know about applying for the financial support this year...
Investors cash in on cyrptocurrency woes to the tune of nearly $4 billion
Cryptocurrencies have taken a shellacking, the two biggest, Bitcoin and Ethereum, have lost over 50 percent of their value this year. The digital coins woes have been a lucrative trade for short-sellers who have cashed in $3.8 billion in profits as of 14 June.
They are betting against companies such as Coinbase, a cryptocurrency exchange platform, and Microstrategy, the largest corporate holder of bitcoin.
However, those looking to join in the short-sellers party may be too late. although the downturn is expceted to continue, the size will be difficult to match and it is becoming more expensive to borrow for the trades.
For months the prospect of a gas rebate card has been mooted in Washington to provide financial relief for households struggling to afford the rising cost of motor fuel. Last week the average price of gasoline reached $5 per gallon for the first time in the United States and experts predict it could rise far higher.
So with the high price of gasoline is causing major issues for motorists,will the White House send out pre-paid fuel cards to help struggling Americans?
Businesses are passes on higher costs from inflation through extra swipe fees
Inflation in the US hit a new high in May clocking in at 8.6 percent, the highest since Decmeber 1981. The Federal Reserve has shifted its stance, moving much more aggressively to tame rising prices.
However, in the meantime, businesses are trying to pass on on the added cost to them from supply chain bottlenecks, increased credit card transaction fees and higher wages through additional fees when customers pay.
The surcharges allow them to offset the hit to their bottomline while not raising prices, so to speak, but they add further financial shock to Americans already struggling to make ends meet. The average US household is forking out $311 per month due to rising prices.
Chipmakers have new headache, Russian export restrictions on rare gases
Chipmakers have been struggling to recover from pandemic-era supply chain bottlenecks that have reduced the global stocks of semiconductors needed for range of consumer products. The shortfall has been acutely felt by car manufacturers.
Semiconductors, which account for the largest share of South Korean exports, were beginning to be affected in the Asian nation after truckers went on strike for eight days. Last week, the government agreed to extend a special minimum wage system to resume cargo shipments.
The lastest problem for the industry now comes from export restrictions imposed by Russian on rare gases including neon, argon and helium to "unfriendly" countries needed to made semiconductors. South Korean manufacturers keep a three month stockpile of the inert, or "noble" gases, so initially supplies won't be disrupted.
Silver lining to a bear market, lower inflation
American household finances are being crushed under the weight of rising prices for food, fuel and other basic necessities. In order to tame the persistent inflation the Federal Reserve is moving aggressively to raise interest rates. The most recent on Wednesday was a 75-basis points hike, the first of such size since 1994.
Wall Street ended Friday with its worst week since March 2020 when covid-19 sent the US economy into a tailspin. The S&P 500 enetered bear market territory even before the central bank's rate hike announcement, which investors fear could choke growth.
While the bear market is wiping out gains to retirement portfolios, it could have one upside, of sorts, they usually bring with them lower inflation.
The S&P 500 is officially in a bear market, joining the Nasdaq. The Dow Jones isn’t quite in the claws of a bear market, yet. The selloff last week began on Monday sparked by fears that the Federal Reserve would raise interest rates more aggressively than had been signaled.
Wednesday's announcement of three quarters of a percent rate hike drove markets down even further.
Elon Musk says Dogecoin might be able to be used to buy merch
Tesla CEO Elon Musk, who is being sued for running a “pyramid scheme” by manipulating the price of Dogecoin, took to Twitter on Saturday to express his views on the cryptocurrency again.
In response to a tweet by Dogecoin's co-creator Billy Markus on his desire people actually “use it for something,” Musk posted “Tesla and SpaceX merch, maybe more down the road.”
His musing about the digital coin in the past have sent its value surging including when he would consider accepting it for merchandise once before. It's lost nearly 85 percent of its value since its peak in August last year.
Inflation not seen in four decades is taking a bite out of American household finances. None feel this more acutely than those who receive Social Security benefits. The shortfall, however, is not new and has been growing over several decades.
At the same time though, if nothing is done in Congress, Social Security beneficiaries could see their monthly payments cut thirteen years from now. A proposal by Democrats would address the issue for the recipients of Social Security benefits with a $200 monthly boost, while shoring up the program for the next 75 years.
How can I check my Social Security payment amount?
The Social Security Adminstration (SSA) oversees a number of financial support programs, designed to support unemployed, disabled or vulnerable Americans and their families. The exact amount on offer for each recipient is based on a series of calculations related to their work history, personal situation and, in some cases, degree of disability.
To check how much you could be entitled to receive, as well as carrying out various other functions, log in to your My Social Security online account...
The Child Tax Credit in 2022 will return to the conditions offered by the IRS before the American Rescue Plan expanded it. The amount of the credit is smaller, and eligibility is more restricted than last year under the rules which were established through the 2017 Tax Cuts and Jobs Act (TCJA). These changes will be in effect through the 2025 fiscal year, if no action is taken by Congress to modify the credit before then.
Supplemental Nutritional Assistance Payments (SNAP) provide an important form of financial support for households struggling to cover the cost of essentials, particularly vital with prices rising across the board and inflation pushing up grocery bills.
SNAP has been boosted by the federal government’s emergency status, which provides additional funds to states. In April the Biden administration extended the national covid-19 public health emergency for a further 90 days, prolonging additional benefits.
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