U.S. default will be 'very damaging to U.S. consumers,' warns IMF head
With thedebtceiling uncertainty loomingoverthe U.S., International Monetary Fund (IMF) managing director Kristalina Georgieva warned that a default intheU.S.wouldincreaseratesandharmAmerican consumers.
"It will be very damaging for U.S. consumers if the U.S.defaults,thatwouldpushinterestratesup…And ifpeopledon'tlikeinflationtoday,they'renotgoing tolikeatallwhatmayhappentomorrow",Georgieva said.
The alarm comes after the Treasury Department's message last month that the U.S. was bumping up against the current borrowing limit of $31.4 trillion. And if the debt ceiling is not raised, the federal government could run out of money to pay all its billsbyJune.
The Treasury Department already began some extraordinary measures to keep paying the government'sbillsinJanuary,includingsuspending investmentsforselectedgovernmentaccounts.
IRS Proposes New Program for Reporting Tips Across Service Industry
Notice 2023-13 contains a proposed revenue procedure that would establish the “Service Industry Tip Compliance Agreement” (SITCA) program,whichtheInternalRevenueService(IRS) says would serve as the sole tip-reporting compliance program between the IRS and employersinallserviceindustries.
The new program, which would be voluntary, wouldreplacethreeotherprograms:theTipRate Determination Agreement (TRDA), the Tip Reporting Alternative Commitment (TRAC), and theEmployerdesignedTRAC(EmTRAC).
The IRS notice is seeking public comment on the proposedprogramuntilMay7,2023.
According to the agency, the proposed SITCA program is “designed to take advantage of advancements in point-of-sale, time and attendance systems, and electronic payment settlement methods to improve tip reporting compliance.”
Souce:
https://www.kitco.com/news/2023-02-06/U-S-default-will-be-very-damaging-to-US-consumers-warns-IMF-head.html
Inflation is taking a toll on America’s 401ks and retirement plans
Inflation may be cooling, but that doesn't mean everyday prices on consumer goods are suddenly dropping. Instead, the heavy toll of today's cost of living is still eating into Americans’ monthly budgets—and it's also forced many to break into their metaphorical piggy banks, including their retirementaccounts.
The average 401(k) participant’s contribution rate droppedfrom6.6%oftheirincomein2021to6.4%in December 2022, according to Bank of America’s 401(k)ParticipantPulsereportreleasedWednesday. It'sasignthatAmericansaremoreconcernedabout short-term financial needs right now, according to thebank’sanalysis.
Americans are also taking money out of their retirement accounts via loans and withdrawals. Nearly 61,000 of the more than 3 million plan participantsBankofAmericatracksborrowedfrom their 401(k) last year, while about 12,350 took withdrawals.
While the amount of money coming out of retirement accounts may be slowing, repaying thosefundsisn'tgettinganyeasier.
Souce:
https://finance.yahoo.com/news/inflation-taking-toll-america-401ks-150839095.html
American small business pessimism on recession, inflation, isn’t relenting
Nearlyhalfofsmallbusinessowners(47%)saythe economyis ina recessionalready, withanalmost equal percentage (48%) describing the economy as “poor.” That’s according to the CNBC|SurveyMonkey Small Business Survey for thefirstquarterof2023.
75% of small business owners saying they are still facing rising costs of supplies and just over half (51%)supplychaindisruptions.
Energy prices have come down, but Ken Simonson, chief economist for The Associated General Contractors of America, said natural gas prices remain high and diesel far above where it was a year ago for businesses that rely on it for powerandtransportation.Andlaborcostsarestill up a lot, even though average hourly earnings growthhastaperedoff.
The survey finds a little under one-third of small businesses (29%) saying they have had open positions for at least three months, and 66% are paying higher wages to bring new employees on board.
Oil prices rise 2% after Russia says it will cut output by 500,000 barrels a day
Russiawillcutoiloutputby500,000barrelsperdayinMarch,DeputyPrimeMinisterAlexanderNovaksaid on Friday, following Western bans on Moscow’s crude and oil products implemented in the past few months.
Theannouncedproductiondeclineamountstoroughly5%ofRussia’slatestcrudeoiloutput,whichParisbased watchdog the International Energy Agency estimated was down at 9.77 million barrels per day in December.
TheBrentcontractforAprildeliverywastradingat$85.58perbarrel,jumpingby$1.10abarrel—over1%— onthenewscomparedtoThursday’scloseprice.Thefront-monthNymexWTIcontractwithMarchexpiry wasat$79.03abarrel,gaining1.2%fromtheprevioussettlement.
He noted that the cut does not apply to gas condensate and will be calculated from actual output levels, notfrom Russia’s quota underthe OPEC+outputagreement. The decisionwas not made inconsultation withtheOPEC+coalition,whichMoscowco-chairs.
Souce:
https://www.cnbc.com/2023/02/10/oil-prices-rise-after-russia-says-it-will-cutoutput.html
