USA finance and payments: summary news | 3 June – AS USA

May unemployment holds at 3.6%, 390,000 new jobs added
New York State gas tax holiday went into effect Wednesday and will end in December 2022
– President Biden laid out three part plan to tackle inflation
– US gas price jumps to record high on Friday at $4.76 per gallon on average
– OPEC announces production increases for July and August
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, average out-of-stock rate nationwide over 73%
– 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
US NEWS
Why does Elon Musk reportedly want to lay off 10% of Tesla employees?
FINANCIAL NEWS
Why are mortgage rates beginning to decrease in the US?
FINANCIAL NEWS
What are the differences between the five types of mortgages?
FINANCIAL NEWS
Is Medicare considered an entitlement program?
US NEWS
US Treasury Secretary Janet Yellen admits inflation forecast errors
US NEWS
How much money can you save with the New York gas tax suspension?
SOCIAL SECURITY
Can I sign up for Medicare if I already get Social Security benefits?
FINANCIAL NEWS
What are my veteran disability compensation rates? VA pay charts 2022
LATEST NEWS
Retirement: Is now OK to retire? What should I consider before making that decision?
Whether you’re dreading retirement, looking forward to it, or not thinking about it at all, it will inevitably come, ready or not. The average American spends around 20 years in retirement, so this phase of your life needs careful thought.
AS USA's Gidget Alikpala discusses the key things you should take into account as you consider retiring
US NEWS
How much were the first, second and third stimulus checks and when were they sent out?
During the covid-19 pandemic, eligible Americans have received three Economic Impact Payments, more commonly known as stimulus checks, from the US federal government. Two were sent out under the Trump administration, while a further payment was approved shortly after President Biden took office.
AS USA looks back over each of the three stimulus checks
Government effort secures greater supply of baby formula
A number of major retailers in the United States have imposed new purchasing restrictions on infant formula in response to a worrying supply shortage. CVS said it was limiting both in-store and online purchases of baby formula to three per order, following a similar cap introduced by Walgreens in March. Kroger has opted for a four-item limit per customer while Target has also placed restrictions on order size.
However there is hope that these desperate measures may no longer be needed after the White House was able to secure extra supplies of infant formula. An estimated 127 million extra bottles are expected to reach consumers in the coming weeks. 

"With today’s excellent jobs report and unemployment remaining at a near-historic low of 3.6 percent, I want to speak very briefly today about our economy and what we’re doing to lower the costs for American families."

"Because of the enormous progress we’ve made on the economy, the Americans can tackle inflation from a position of strength.  Still a problem, but we can tackle it from a position of strength."
When will the high gas and food prices end?
The May jobs report brought positive news for the Biden adminstration and suggested that the sky-high rates of inflation may be coming down, but that does not mean that there will be any immediate relief for consumers feeling the pain. Speaking to reporters at the White House earlier this week, President Joe Biden said that there is no quick fix for the high gas and food prices.
"The idea we're going to be able to, you know, click a switch and bring down the cost of gasoline is not likely in the near-term, nor is it with regard to food," he said.
Biden enjoys positive May jobs report
The hotly anticiapted Labor Department jobs report for May found that the United States was still making good progress in job creation, while managing to address the high rate of inflation which has caused major concern. CNN's White House correspondent John Harwood describes it as a "Goldilocks report", meaning that the balance between growth and inflation has been found. Too much growth would push inflation rates higher, but too little would suggest that the economic recovery is stagnating. 
US NEWS
Why does Elon Musk reportedly want to lay off 10% of Tesla employees?
Earlier today the Labor Department released the May jobs report, finding that the United States economy had added 390,000 new jobs over the course of the month. However Tesla CEO Elon Musk has a much less positive outlook and warned employees that the company is likely to have to cut around 10% of staff. 
In messages to staff and executives reported by Reuters, Musk paints a very different picture of the state of Tesla's finances, warning that they are "overstaffed."
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Who's to blame for the high rate of inflation?
There are numerous factors contributing to the high rate of inflation in the United States, meaning that there is no one person to blame for the price rises that have hurt consumers in recent months. The outlook remains mixed for the markets, as Former Dallas Fed President Richard Fisher, senior advisor to Barclays, explains to CNBC here. 
US NEWS
How much money can you save with the New York gas tax suspension?
Nationally the average price of gasoline is over fifty percent higher than it was a year ago. New Yorkers are seeing prices well above the national average with $5-plus the average in five counties. Diesel is even more dear in the Empire State with a gallon costing on average $6.45, nine cents less that its peak in late May, but twice what it is was last year.
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. 
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Buy now, pay later loans have more downsides that upsides for borrowers
Regulators have expressed concerns about a service which allows shoppers to take on short-term, often interest-free loans to make purchases. The number of "Buy Now, Pay Later" loans exploded during the pandemic as shoppers were trapped at home. The are worries that the unregulated lending is creating a debt bubble that could blow up.
Some younger users of this financial product may think that they are building a better credit score when they pay their tab on time. However, the companies that issue the point-of-sale loans generally don't report them or prompt payments to the Consumer Bureau. This makes it difficult to judge just how much outstanding debt individuals have taken on and it doesn't allow borrowers to develop a strong credit history.
On the other hand, should the borrowers miss payments, a recent survey found that 42 percent admitted to making late payments in April, the companies may report the deliquency of the debt on top of charging fines.
May jobs report suggest market coming into balance
The United States has been registering record job growth as the economy recovers from the damage inflicted by the pandemic-induced disruptions. The rapid recovery has also brought with it imbalances in the labor market which led to a shortage of workers reuslting in wages being driven up.
After months of 500K-plus job gains, May's job report from the Bureau of Labor Statistics show a slight cooling in the red-hot labor market with 390,000 new jobs added. This is good news for the Biden administration as the president hopes that the economy transitions to more stable and sustainable growth to bring down inflationary pressures.
Elon Musk says Tesla needs to cut workforce by 10 percent
In an message seen by Reuters, electric carmaker boss Elon Musk told executives that he has a "super bad feeling" about the economy. The email, titled "pause all hiring worldwide", said that the company needs to shed 10 percent of the 100,000 strong global workforce. The news come one day after the billionaire told employees that they would have to return to the office full-time or risk losing their job.
Biden administration cancels student loan debt for half a million borrowers
On Thursday, Vice President Kamala Harris joined by Education Secretary Miguel Cardona announced that all outstanding federal student loans borrowed by former Corinthian Colleges students would be canceled. The Department of Education will notify the roughly 500,000 former students who will benefit from the debt forgiveness in the coming weeks through a letter,
Corinthian Colleges Inc closed in 2015 after the for-profit eduction provider was investigated and sued for predatory and unlawful practices. The erasure of debt will be automatically granted to all former students who attended any campus owned or operated by the defunct company since its founding in 1995.
Ford announces $2.3 billion investment to ramp up electric vehicle production
As part of the auto maker's plan to dedicate $50 billion to electric vehicle production by 2026, Ford laid out an initial $2.3 billion investment on Thursday. The company plans to increase global EV output to 2 million annually over the next four years, representing over a third of the cars it will build. The Michigan-based automaker plans to add a new electric commercial vehicle to its lineup and expand production of the new F-150 Lightning pickup truck to 150,000.
Assembly plants in Michigan, Missouri and Ohio will receive in total $3.7 billion to boost production of both electric and gasoline-powered vehicles. Ford Motor Company said it will add more than 6,200 hourly jobs and convert 3,000 temporary workers into full-time employees who will receive healthcare benefits and higher pay.
Latest News
US rising fuel prices: Why are gas and diesel prices so expensive?
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.”
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OPEC plan to boost production by 200K barrels does little to lower price
OPEC announced on Thursday that the energy cartel will move forward a planned increase in production to July and August from 432,000 barrels per day as previously agreed to 648,000.
The news helped push down the price of crude oil only slightly as supply is expected to stay tight as few members have spare capacity and sanctions are lowering the amount of Russian oil reaching market. Addtionally, China has begun relaxing covid restrictions in Beijing and Shanghai which temporarily reduced demand in the country.
Baby formula shortage worsens across the United States
The nationwide average out-of-stock level reached 73.6 percent at the end of May with ten states crossing the 90 percent threshold. Inventory levels began to decline last summer but the shortage was exacerbated when a production facility run by Abbott Nutrition, the company with the largest share of the baby formula market, was closed due to bacterial contamination.
That factory will resume production in the coming days but it will still take six to eight weeks from that moment for new formula to hit the shelves. In the meantime, President Biden launched "Operation Fly Formula" to speed up delivery of stock from overseas. The third shipment is scheduled for 9 June.
US NEWS
US Treasury Secretary Janet Yellen admits inflation forecast errors
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.
Read more
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. 
FINANCIAL NEWS
What are the differences between the five types of mortgages?
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…
Read more
FINANCIAL NEWS
Why are mortgage rates beginning to decrease in the US?
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.”
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US finance news, live updates: welcome
Good morning and welcome to AS USA's daily live blog for Friday 3 June 2022, bringing you the latest financial news in the United States.
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