Several records were shattered this week as the stock market surged and the amount of federal debt soared past a significant benchmark. Unemployment statistics improved even though many large companies announced layoffs.
The NASDAQ Composite soared past 12,000 for the first time and the S&P 500 also hit a new high after to follow through a very strong August showing. Stocks continue to be led by the big technology and stay at home stocks like Microsoft, Amazon, Facebook and Apple.
The federal debt held by the public is now $20.7 trillion, which just topped the $20.6 trillion Gross Domestic Product for the first time since World War Two. The federal deficit will be about $3.3 trillion this fiscal year, which is triple the deficit for last year. The Social Security Trust Fund is now going to run out of money in 2031, a year earlier than had been forecast. The Medicare Hospital Fund will run out of money in 2024 instead of 2026. This is happening because the economic hit from the coronavirus is depressing tax revenue and causing spending to soar. And all of this does not count any new rescue bill which Congress may eventually pass.
The numbers on unemployment improved, as 1.37 million new jobs were created in August and the unemployment rate fell to 8.4% from 10.2%. The number of initial jobless claims fell to 881,000, down from 1.1 million a week ago. There are now 29 million Americans getting unemployment checks. Those numbers may get worse as large companies announce layoffs. This week United Airlines says it will furlough 17,000, Boeing will cut 19,000 and Ford 1400. Several cities are about to cut their payrolls sharply because they have not received any aid from Uncle Sam.
When the CARES Act expired at the end of July, the national moratorium on mortgage foreclosures and rental evictions also went away. Some cities and states have reinstated it, but there still may be a wave of evictions and foreclosures this fall if people can’t pay their rent or mortgages.
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