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Federal Reserve, buoyed by stronger economy, lifts rates again

U.S. economy continues its strong performance The Federal Reserve on Wednesday raised interest rates one notch higher as the U.S. economy continues to get healthier. The rate hike, which was widely expected, was the third this year. Policy makers pointed to the lower number of unemployed workers, increased spending by households, and bigger investments by businesses in recent quarters. “The labor market has continued to strengthen and … economic activity has been rising at a solid rate,” the Federal Open Market Committee said in a statement following its two-day meeting. The federal funds rate, which helps determine rates for mortgages, credit cards and other borrowing, will now hover in a range of 1.25% to 1.5%. Overall, rates are still historically low. Related: Tax cuts could make it harder to fight the next recession Two Fed officials dissented on the decision: Chicago Fed President Charles Evans and Minneapolis Fed President Neel ... Read More »

Why Trump's 'giant' middle class tax cut is less than advertised

Tax cuts are a big gift to business. But will workers win too? President Trump on Wednesday made what the White House billed as his “closing argument” for the Republican tax plan making its way through Congress. His main argument: The proposals will result in a “giant tax cut” for the middle class. “We want to give you … a giant tax cut for Christmas and when I say ‘giant’ I mean giant,” Trump said. The final bill is still being worked out. But based on what is known of the House and Senate tax bills that are currently being merged, the president is overstating it when he describes middle class tax cuts as “giant.” Here’s some context on the cuts in store for middle-income households based on nonpartisan analyses of the Senate-passed bill: Modest increases: Those in the middle classwould see tax cuts, on average, especially in the first ... Read More »

Britain has lost 65,000 retail jobs since Brexit vote

QMB’s Piggy Bank Brexit Jobs Tracker Britain has lost 65,000 retail jobs since it voted to leave the European Union, a decline fueled by increased online competition and a Brexit-induced wage squeeze. Employment data published Wednesday show the number of jobs in the sector dipped below 5 million in September. Weak consumer spending suggests more painto comeover the holiday season. “It reflects the pressure on the [retail] sector,” said Howard Archer, an economic adviser to EY. “Consumer spending has been softer for most of this year and retail sales have been lower.” Data compiled by IHS for Visa(V) show that spending in U.K. brick-and-mortar stores dropped 3.5% over the previous year in November. It was the seventh consecutive monthly decline, and one of the biggest drops since 2012. Meanwhile, online spending was 2.4% higher in November. Visa said it expects total consumer spending to decline this holiday season for the ... Read More »

Fed expected to lift rates as Yellen delivers final press conference

What does a Trump presidency mean for the Fed? There will likely be one more rate hike from the Federal Reserve in 2017 before chairwoman Janet Yellen steps down. The Fed is almost certain to deliver a third rate increase at its final two-day Federal Open Market Committee meeting of the year, which concludes on Wednesday. Policymakers have signaled such a move would be likely, citing a strengthening U.S. economy and a declining unemployment rate. “Fed rhetoric has made it clear that a December rate hike is viewed as appropriate well in advance of any vote that may take place; in other words, the rate hike was predetermined some time ago,” David Bloom, global head of FX Research for HSBC wrote in a note to clients. Related: Jerome Powell says Fed likely to hike rates in December The federal funds rate, which helps to determine rates for mortgages, credit cards ... Read More »

Don't expect a big pay raise in 2018

Asking for a raise: Women vs. men Don’t get your hopes up for a big salary boost next year. A report from consulting firm Korn Ferry predicts that workers around the world will get a real pay increase of just 1.5% on average in 2018. That’s the smallest bump forecast in five years. The real pay figures are calculated by subtracting inflation from expected salary increases. American workers are in line for a 3% pay increase, but 2% inflation means they’ll end up being only 1% better off. Britain, Albania, Egypt and Nigeria have it much worse. Korn Ferry predicts workers in these countries will see their raises wiped out entirely by price hikes. Workers in Asia are in better shape, with real wages expected to grow by 2.8%. Chinese employees will do particularly well with an increase of 4.2%. Related: Why the world isn’t getting a pay raise Why ... Read More »

Is the taxman coming for your steak?

How the animals you eat get fat First it was tobacco. Then sugar. Will meat be taxed next? Farm Animal Investment Risk and Return (FAIRR), an investor network that advises on factory farming, says it is “increasingly probable” that countries will start taxing meat in order to fight climate change. The group, backed by investors who manage $4 trillion in assets, argues that some governments could introduce “sin taxes” on meat consumption within five to 10 years in order to reduce greenhouse gas emissions. Livestock farming is responsible for around 14.5% ofall such emissions, according to the Food and Agriculture Organization of the United Nations. It also requires huge amounts of water and land. Researchers say the issue must be addressed if countries are going to stick to the Paris Climate Agreement, the second anniversary of which is being celebrated Tuesday at a summit in Paris. The aim of the ... Read More »

Obama tweets: Final days to enroll in Obamacare are here!

What you need to know about Obamacare 2018 He may no longer be in office, but former President Obama is still encouraging people to sign up for his landmark health reform law. The former commander in chief reminded Americans in a tweet and a Facebook post that they have until Friday to sign up for Obamacare for 2018 in most states. He also joined a conference call to thank several hundred people who are helping Americans sign up for coverage on the exchanges. “I know that people who are on this call are already on the case, but I wouldn’t be doing my job if I didn’t give it one last plug, ’cause there are a lot of people who don’t know that they’re eligible for financial assistance,” Obama said on the call hosted by Get America Covered, which was founded by his former administration officials. “They’re not aware of ... Read More »

Treasury analysis asserts GOP tax plan pays for itself

How the Republican tax plans would impact you With just days to go before House and Senate Republicans want to vote on a final tax bill, the Treasury Department issued a one-page memo outlining its views on the economic growth prospects of the Senate-passed version of the bill. Its conclusion: The tax bill, in combination with the rest of the White House economic agenda, will not only generate enough new revenue to pay for the tax plan, but generate an additional $300 billion over a decade. How it arrived at that conclusion, however, has been called into question by tax policy experts. “This is not a serious analytical effort that could withstand peer review,” said Mark Mazur, director of the Tax Policy Center. Related: Top Senate Democrat seeks broader inquiry into Treasury’s missing tax analysis In modeling the Senate tax plan, the Treasury’s Office of Tax Policy came to a ... Read More »

Hispanic unemployment at all-time low under Trump

U.S. economy continues its strong performance Ivanka Trump says Hispanic unemployment is at its lowest rate ever. She’s right. The president’s daughter, a senior White House adviser, flagged the statistic Friday morning shortly after the Labor Department released November unemployment numbers. The Hispanic unemployment rate fell to 4.7% last month, down from 4.8%. Overall U.S. unemployment remained at 4.1%, a 17-year low. The Labor Department has unemployment data broken down by race and ethnicity dating back to 1973. “This Administration and @realDonaldTrump are working hard to create opportunities for all Americans,” Ivanka Trump said. “…and we are just getting started!” The Hispanic unemployment rate dropped to 4.7% – the LOWEST in the history of the United States. This Administration and @realDonaldTrump are working hard to create opportunities for all Americans…and we are just getting started! ???????? #MAGA#JobsReport — Ivanka Trump (@IvankaTrump) December 8, 2017 It’s certainly good news for the ... Read More »

4 red flags in the GOP tax bills

Tax cuts: Broken promises They’re riddled with unintended consequences. They would create new loopholes. And they don’t live up to the big promises made by President Trump, Treasury Secretary Steven Mnuchin and Republican lawmakers. Still, Republicans hope to merge the hastily passed House and Senate tax bills into one final piece of legislation before Christmas. The accelerated pace has policy watchers worried. “Historic tax reform efforts involved discussion drafts of legislative language, hearings on those specific proposals, extensive public comment periods. None of that is happening now,” Lily Batchelder, a former chief tax counsel on the Senate Finance Committee, tweeted. As tax experts, businesses and accountants continue to unpack what’s in the bills, here are just four warning signs that the plan might not deliver what was promised or intended. Red flag #1: Tax plan would not simplify the tax code Republicans have been promising a simpler code. Some measures ... Read More »

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