By David Pilley on February 2, 2012

If you needed another reason to not open a new line of credit, try gasoline prices. Much of your everyday spending deals with the essentials of food and shelter. Stretch it out over a month, and you’ll deal with a bunch more bills, like rent/mortgage, utilities, and miscellaneous entertainment. Gasoline is one of the red flags in your budget. It’s an expenditure that isn’t as planned as it should be. You might just decide, “Oh, I’m running low on gas” and then go fill up. Making your gas tank fill-ups more structured can be difficult because of the volatile nature of gas prices. Not only do they constantly change, they are different in every state, even in different cities within the same state. However, you can become more structured in dealing with gasoline purchases.

In the third week of January, the national average of gas was $3.39 per gallon. This is about 17 cents higher than December, and it is a record high for the month of January. This is unusual because gas demand is currently going down. (A major refinery in the Virgin Islands will be closing down in February. It produced about 350,000 barrels per day.) Analysts say tensions in the Persian Gulf have kept oil prices around $100 per barrel, but Iranian imports are banned in the US. Who exactly sets gas prices is downright convoluted, but it basically comes down to local taxes, competition, and distance from oil refineries. Prices at individual gas stations can actually change multiple times during the day because the store owners drive by their competitors every day to keep track of what they are doing. Because gas prices are subject to change, I suggest you check out gasbuddy.com to check out average gas prices in your city and state. (It saves driving around to see them…)

So, gas prices could go up in the near future, or they may go down, or they might not change at all. It’s hard to tell, so what can you do to save up on gas? Well, carpooling or taking public transportation from time to time will save you immediately. This might not always be an option, so become a better note taker. Keep track of how many miles you drive per day by using your car’s odometer. Whenever you fill up on gas, write down the total cost, the number of gallons, and the cost per gallon. As a safety net, always keep a spare gallon of gas in the trunk of your car. After you keep notes for a while, say a month or so, you can analyze the data to see how many times a week you should fill your tank. Besides using the website I supplied, you can also watch your local news for reports on local gas prices. (This is usually more common in the summer, when most people go on vacation, and gas demand is higher.) If you write down what you spend and keep track of local prices, you will not fall victim to overspending on gas!

By: Lissette Saca
September 9, 2011 10:00am

A warm reception greeted President Obama as he entered the House Chamber last night to deliver his speech on jobs. This speech had been highly anticipated by, not only members of congress, but also by the countless number of people in our country without jobs. Obama started off by saying that “we are meeting at an urgent time for our country.” He stressed that action must be taken immediately and urged lawmakers to “stop the political circus and actually do something to help the economy.”

The purpose of Obama’s proposed $447 Billion American Jobs Act is to put more people back to work and to put more money back in the pockets of those people who are working. The act specifically plans to help America’s teachers, manufacturing workers, long-term unemployed and both small and big business. To achieve this, the act features tax breaks for companies who hire new workers who have been out of work for more than six months and who also hire America’s veterans. It also creates new construction jobs which will “repair and modernize” at least 35,000 schools, which will shift the focus back to increasing education for our youth and will “put our teachers back in the classroom where they belong.” The propositions in the bill are nothing new, Obama made it very clear that what the American Jobs Act proposes has been supported by both Republicans and Democrats in the past. President Obama assured the American public that the proposed act, if passed, will not add to the deficit, it will be paid for. How?

“Obama said he will ask Congress to increase the $1.5 trillion target in deficit reduction being pursued by a special joint congressional committee to cover the cost of the plan and propose his own deficit-reduction plan on September 19 that would reform entitlement programs such as Medicare while changing the tax system to end loopholes, lower the corporate tax rate and increase taxes for the wealthy.” (CNN.com)

The current debate circling news outlets after the speech? Will Republicans support the American Jobs Act as proposed by the President? The answer so far? Yes and No. The truth is that though most Republicans believe that reducing government spending is the best way to get the economy back on track, not through increasing spending, such as Obama’s plan proposes. They do, however, agree with some of the proposals in Obama’s Jobs Bill such as payroll tax cuts and modifications to Medicare. Throughout his speech, President Obama urged lawmakers to “pass this jobs bill right away.” Whether his pleas are heard remains to be seen.

By: Lissette Saca
August 4, 2011 5:30pm

Today was a grim day on the floor of the New York Stock Exchange (NYSE) as the closing bell rang announcing the end of the trading day. The market closed at 11,383.68, a decrease of 512.76 points and 4.31% lower than the average. This free fall in the numbers caused the US markets to lose their entire gains for the year. The reason for this plunge? Fear on the part of investors caused by debt and data numbers which indicate domestic and global economic slowdowns. On the domestic front, the US debt crisis and uncertainty in the future of the US economy caused many stock market investors to sell their stock. Unemployment levels at 400,000 also caused volatility in the market, pending the release of tomorrow’s employment situation report for the month of July. The consensus level for tomorrow’s report is not expected to be all that great, but there are still high hopes.

On the global side, investor fears of the European debt crisis also contributed to the DOW plunging more than 500 points today alone. As debt problems in Europe spread from Greece to Spain to Italy, Japanese and European central banks and policymakers began to take measures in order to avoid default, which caused increased volatility in today’s market. Investors fear that US markets might be affected, which has caused alarm and panic in the market, adding to the urgency of investors to sell. Additionally, a loss of more than 3% in European markets has also increased the fear amongst investors. Italy is the 8th biggest economy and the possibility of default has investors spooked.

Today’s numbers caused many questions about the future of our economy. Mainly, is another recession possible? Should I sell or stay on my stocks? Despite the fact that today’s market numbers show the worst sell off since the 2008 financial crisis, market analysts are urging long-term stockholders not to sell. The reason for this is that it is too much of a risk to sell, as you must be right twice; once when you sell (to make sure that you get the best value for your stocks) and again to know when to come back and re-enter the market. Analysts will be keeping a close eye on foreign markets to see if the sell-off continues when they open at 8pm EST. Regardless, there is still hope in tomorrow’s employment level numbers, which could cause stocks to rally back. Let’s keep our fingers crossed!

By: Lissette Saca
July 29, 2011 8:00pm

3 days left. Just 3 days for the debt ceiling to be raised in order to avoid a default on our nation’s debt. Today the house passed the GOP debt plan and now the vote moves on to the senate for approval. Though it seems that we are moving forward in the debates, there is already speculation that the debt bill is DOA before it even gets to the senate, largely in part because the senate is mostly democratic (none of which seem to support the bill). The debates in Washington have not only caused a stir amongst law makers, they have also piqued the interest of Americans who wonder how what is decided in the next few days will affect them and their wallets.

One word that has been used in the debate which has sparked the interest of Americans and has made the debate personal is credit rating. There are three credit rating agencies which determine the country’s credit rating: Moody’s, Standard and Poor’s (S&P), and Fitch Rating. The US has consistently earned a AAA credit rating since the founding of Moody’s in 1909, a rating which was in jeopardy a short while ago. Towards the beginning of the debt ceiling debate and amidst possible talks of default (though now that possibility seems unlikely) credit agencies reported that if a debt deal was not reached soon, they would be forced to downgrade the nation’s credit rating. As the debate progresses, however, credit rating agencies have stated that the US is likely to keep Moody’s AAA credit rating though agencies might instead shift the US outlook to a negative one in order to indicate the uncertainty faced by the US in recent debt talks. And while this may not affect the US as much as a change in its credit rating, it will increase caution on the part of lenders and the effects on your wallet may be felt soon.

It is thanks to the US’s AAA credit rating that the nation benefits from having the lowest lending risk and therefore, the lowest interest rates than in other countries. Without that top rating, lending becomes riskier, forcing lenders to demand a higher rate of return on their investments through the use of higher credit card rates, student loans, mortgages and car loans. CNNMoney article “Debt Ceiling and your Money: Now it’s Getting Personal” breaks down each of the above categories and explains when you will notice the higher rates. And though not all are immediate, they will all be felt. It is crucial for the American people to become involved with the decisions that are made in Washington, as they will directly impact how you interact with your lenders and, often, where your hard earned dollars go.

By: Lissette Saca
July 22, 2011 6:00pm

From unemployment to housing price levels and government policy debates, this week has been a very interesting one. Here is a quick look at the numbers and headlines that made news this past week.

Employment: Despite an overall decreasing trend in unemployment levels, yesterday’s Jobless Claims Report stated that the number of individuals who filed for unemployment for the week of July 16th increased to 418,000 from a previous 405,000 from the week before. When looking at levels of unemployment, it is always important to look at the big picture (or what is commonly known as the long-run). Because unemployment levels can vary significantly from week to week, there exists a much more accurate depiction of the “actual” level called the 4-week moving average. This average provides a number which accounts for volatility in the weekly unemployment levels which may have been caused by external factors such as significant layoffs from one single company. Therefore, despite the increase in this week’s unemployment levels, long-run levels of unemployment show that the number of jobless claims filed has, in fact, decreased from 423,250 to 421,250 within the last four weeks. Having said that, what does this week’s number mean? Well…. It means that more individuals filed for unemployment this week when compared to last week. However, looking at the 4-week moving average, the overall level of unemployment decreased and there is an overall declining trend in the number of filed jobless claims. Things are looking up in this economic indicator overall!

Housing: Housing continues to be the slowest of all the economic indicators to recover. Existing home sales continued to decrease, even below consensus levels, for the month of June. Nevertheless, there is some good news. Home price levels released by the Federal Housing Finance Agency for the month of May showed a slight increase in the average price of homes on the market; a welcome change from previous weeks. What does it all mean? In analyzing the numbers and their overall trends, the housing sector is still in a lag. Homes are now increasing in value; however, they are not selling. This can be a problem for anyone who is in the home buying market. The increasing price of homes may be a leading reason why home sales are in decline. And with the increasing volatility of the recent unemployment levels, many can no longer afford to purchase their dream home.

Government Policy Debate: “Raising the debt ceiling” and “debt ceiling default” have been a few of the most talked about topics and phrases this past week. Heated talks and exchanges have occurred in Washington D.C. as the August 2nd deadline for the government to increase the nation’s debt ceiling to avoid defaulting on its debt approaches. The crucial question: Can a debt compromise be reached? Many states don’t seem to think so and are bracing for a debt ceiling default, despite the fact that government officials have not reached an agreement on whether to raise the debt ceiling (or because they have not done so). Many states have begun to take out loans to ensure that they have enough to cover their requirements. Contingency plans are being put in place by various states so that they can get their slice of the pie (which comes in the form of money that the federal government pays individual states for services such as education, Medicaid, transportation and others). However, if there is no agreement reached and the debt ceiling is not raised, that money may never come. Regardless of individual positions on the subject, or of the arguments that are taking place, we will have our answer on August 2nd. So let’s brace for impact!

And that’s your week in review!