Month: September 2022

The Conference Board Consumer Confidence Index increased in September for the second consecutive month. The Index now stands at 108.0 (1985=100), up from 103.6 in August. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—rose to 149.6 from 145.3 last month. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—increased to 80.3 from 75.8.

“Consumer confidence improved in September for the second consecutive month supported in particular by jobs, wages, and declining gas prices,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “The Present Situation Index rose again, after declining from April through July. The Expectations Index also improved from summer lows, but recession risks nonetheless persist. Concerns about inflation dissipated further in September—prompted largely by declining prices at the gas pump—and are now at their lowest level since the start of the year.”

“Meanwhile, purchasing intentions were mixed, with intentions to buy automobiles and big-ticket appliances up, while home purchasing intentions fell. The latter no doubt reflects rising mortgage rates and a cooling housing market. Looking ahead, the improvement in confidence may bode well for consumer spending in the final months of 2022, but inflation and interest-rate hikes remain strong headwinds to growth in the short term.”

Some $45.6 billion in pandemic unemployment benefits may have been fraudulently paid to criminals between March 2020 and April 2022, the US Department of Labor’s Office of the Inspector General said in a memorandum on Thursday.

Fraud within the nation’s unemployment system skyrocketed after Congress enacted a historic expansion of the program to help Americans deal with the economic upheaval sparked by the Covid-19 pandemic in March 2020. State unemployment agencies were overwhelmed with record numbers of claims and relaxed some requirements in an effort to get the money out the door quickly to those who had lost their jobs. Within five months, more than 57 million people filed claims for unemployment benefits, the inspector general’s office said.

“Hundreds of billions in pandemic funds attracted fraudsters seeking to exploit the UI program — resulting in historic levels of fraud and other improper payments,” Inspector General Larry Turner said in a statement.

Nearly a million Social Security numbers were used by people who filed for benefits in two or more states, resulting in benefits paid from more than one state, the inspector general’s office said. They received nearly $29 billion in potentially fraudulent payments. And 1.7 million Social Security numbers associated with suspicious email addresses were used to file for $16.2 billion in benefits.

The inspector general’s office said that it has had difficulty getting unemployment insurance data from state workforce agencies until subpoenas were issued. In some cases, the data sent was incomplete or unusable.

The inspector general’s office also took issue with the Department of Labor’s Employment and Training Administration, which oversees the unemployment insurance program, saying the agency has not implemented the office’s previous recommendations including to collaborate with state agencies to establish effective controls to mitigate fraud and to work with Congress to require state agencies to cross-match high-risk areas.

“ETA’s lack of sufficient action significantly increases the risk of even more UI payments to ineligible claimants,” the inspector general’s office wrote in the memorandum.

The inspector general’s office also announced Thursday that more than 1,000 people have been charged with crimes involving unemployment benefits fraud since March 2020, and there have been more than 400 convictions to date. It has opened more than 190,000 investigations into unemployment benefits fraud, an increase of more than 1,000 times in the volume of the office’s unemployment insurance work.

Yesterday, the Public Service Commission of Wisconsin (PSC) announced the creation of a new, additional area code to overlay the area in which the 608 area code is now in service.

The 608 area code is expected to run out of assignable prefixes (the three numbers in a phone number following the area code) in the first quarter of 2024. The new 353 area code will be used to provide telephone numbers to new customers. All current customers will retain their existing telephone numbers and will continue to dial and receive calls without change.

The Commission approved the petition by the North American Numbering Plan Administrator (NANPA), the neutral third-party area code relief planner, to overlay a new area code. This decision will provide additional numbering resources to meet the demand for telephone numbers. The new 353 area code will be in service by late 2023.

An area code overlay adds a second area code to the geographic region served by the existing area code. Therefore, multiple area codes co-exist within the same geographic region. Once the 608 area code runs out of assignable prefixes, new customers in southcentral and southwestern Wisconsin may be assigned telephone numbers in the new 353 area code. Customers will continue to dial the three-digit area code for all calls to and from telephone numbers with the 608 and 353 area codes. The price of a call will not change due to the overlay. Customers can still dial just three digits to reach 911, as well as 211, 311, 411, 511, 611, 711, 811, and 988, the new Suicide & Crisis Lifeline.

The plan filed by the North American Numbering Plan Administrator can be found here: PSC REF#: 440694

Retail sales, a measure of how much consumers spent on a number of everyday goods, including cars, food and gasoline, rose 0.3% in August, the Commerce Department said Thursday.

That is an improvement from the downwardly revised data in July, which showed that retail sales actually tumbled 0.4%.

The August advance is not adjusted for inflation – which rose 0.1% last month – meaning that consumers may be spending the same but getting less bang for their buck.

“Consumer spending has flatlined in real terms in the face of steep inflation and interest rate increases from the Fed,” said Ben Ayers, a senior economist at Nationwide. “While retail sales continue to move higher, much of this is due to higher prices which push up the dollar volume of sales. This is another indication of the general slowdown in activity across the economy this year.”

A potential nationwide freight rail strike is looming, threatening to cripple the U.S. economy ahead of the holiday shopping season. Roughly 115,000 rail workers could walk off the job as soon as September 16 if they cannot agree to a new contract with railroads.

Five of the 13 unions representing rail workers have reached tentative agreements with railroads to enact the Presidential Emergency Board (PEB) recommendations, which call for 24 percent pay raises, back pay and cash bonuses.

But the bulk of railroad workers belong to unions that haven’t yet agreed to a deal. It’s also unclear whether workers would vote to ratify PEB recommendations that don’t address their concerns about punishing hours and rigid schedules that make it difficult to take time off for any reason.

“I would suspect that most railroad workers would love to strike, would love to get back at their employers after years of abuse while they watched the industry make record profits,” said Ron Kaminkow, an organizer at Railroad Workers United, which represents rank-and-file railroaders.

Federal law gives Congress the power to block or delay a railroad strike. If workers were to walk out, lawmakers could vote to enact the PEB deal or appoint arbitrators to fast-track a new contract, among a range of other options.

The Association of American Railroads, which estimates that a national rail shutdown would cost the U.S. at least $2 billion a day, said that lawmakers should vote to implement the PEB recommendations in the event of a strike to “instantly reward employees and reduce economic uncertainty.”

Experts say that an extended walkout would devastate industries that rely on freight to transport grain, coal, diesel, steel and motor vehicle parts. Shipping containers would pile up at ports, severely congesting supply chains and sending prices soaring ahead of the holidays.