Current Events in July 2022

Could the Social Security Administration (SSA) raise monthly Social Security checks to help seniors cushion the blow of inflation’s 40-year high? The Senior Citizens League says it’s highly possible based on a trusted running estimate for next year’s Social Security Cost of Living Adjustment (COLA). 

If an increase occurs, the average retiree would see their SSA benefit of $1,668 grow by $175.10 – about 10.5% – per month, which is much better than originally expected. A separate 2023 COLA estimate from the Committee for a Responsible Federal Budget predicted a 10.8% increase.

“If inflation runs ‘hot’ or higher than the recent average, the COLA could be 11.4%,” said Mary Johnson, Social Security and Medicare policy analyst with The Senior Citizens League. “If inflation runs ‘cold’ or lower than the recent average, the COLA could be 9.8%.”

If that 11.4% COLA increase happens, it would be the second highest increase in history behind the record 14.3% increase in 1980, the last time seniors saw a double-digit increase.

Medicare premiums may soon head lower

According to The Senior Citizens League, financial conditions for seniors have been deteriorating in recent years. The group estimates that SSA benefits recipients have lost 40% of their buying power since 2000.

“That’s the deepest loss in buying power since the beginning of this study by The Senior Citizens League in 2010,” Johnson noted.

Luckily, CNN reports that seniors might soon get a break when it comes to Medicare premiums. Earlier this year, older consumers were forced to deal with a 14.5% spike in Part B premiums, a move that raised monthly payments for those in the lowest income bracket from $148.10 to $170.10 per month. That increase was largely due to a big jump in the price for Aduhelm, a treatment for Alzheimer's disease. 

However, after some pushback from the U.S. Food and Drug Administration (FDA), the drug's manufacturer cut prices, and the Centers for Medicare and Medicaid Services limited coverage for the medication. The good news for seniors is that this adjustment will likely lower 2023 premiums. A final decision on that is expected to come this fall. 

COVID-19 ‌tally‌ ‌as‌ ‌‌compiled‌‌ ‌by‌ ‌Johns‌ ‌Hopkins‌ ‌University.‌ ‌(Previous‌ ‌numbers‌ ‌in‌ ‌parentheses.)‌

Total‌ ‌U.S.‌ ‌confirmed‌ ‌cases:‌ 89,225,558 (88,947,827)

Total‌ ‌U.S.‌ ‌deaths:‌ 1,023,635 (1,021,853)

Total‌ ‌global‌ ‌cases:‌ 559,652,282 (557,824,287)

Total ‌global‌ ‌deaths:‌ 6,363,656 (6,356,013)‌

BA.5 becomes the dominant strain

COVID-19 cases are rapidly rising in wide areas of the U.S., and health officials say BA.5, a subvariant of the Omicron variant, is mostly responsible. The subvariant is highly transmissible, and people in areas of high infection are being urged to wear masks when indoors.

COVID-19 cases that were reported to the World Health Organization (WHO) so far this month rose by nearly 30%, and scientists say BA.5 and its twin, BA.4, appear to be driving the numbers higher in both the U.S. and Europe.

Health officials say the spread of the subvariants has resulted in an increase in new cases, but they say most of the cases appear to produce mild to moderate symptoms. They say hospitalizations have risen, but not like in previous COVID-19 waves.

FDA authorizes Novavax vaccine

There are now four COVID-19 vaccines that can be used in the U.S. The U.S. Food and Drug Administration (FDA) has granted emergency use authorization (EUA) to the Novavax COVID-19 vaccine for use in adults aged 18 and older.

“Authorizing an additional COVID-19 vaccine expands the available vaccine options for the prevention of COVID-19, including the most severe outcomes that can occur, such as hospitalization and death,” said FDA Commissioner Dr. Robert M. Califf.

Seniors urged to get a second booster shot

White House officials who are managing the COVID-19 response are urging Americans who are 50 years old or older to get a second booster shot.

"If you have not gotten a vaccine shot in the year 2022, if you have not gotten one this year, please go get another vaccine shot," said response coordinator Dr. Ashish Jha. "It could save your life."

Around the nation

• New Jersey: Six counties have now been classified as having a “high” risk of COVID-19 transmission. Health officials recommend that people in Morris, Monmouth, Burlington, Camden, Atlantic, and Cape May counties wear masks indoors regardless of vaccination status. 

• New York: Gov. Kathy Hochul has announced a new free hotline for those who test positive for COVID-19 but don't have a health care provider. "We've made real progress in our fight against COVID-19, but as new variants continue to spread it's important to continue to adapt and expand our efforts to protect New Yorkers," Hochul said. 

• Colorado: After a string of days with no COVID-19 patients, Rose Medical Center reports that hospitalizations are increasing again. But doctors say it appears to be manageable. "I think we're settling into kind of a new normal. COVID's here to stay for a while," said Dr. Andrew Weinfeld, the hospital’s chief medical officer. "We expect it. There's much less surprise about it."

• Virginia: Gov. Glenn Youngkin and four members of the Virginia congressional delegation report that they have heard nothing from the Defense Department after they asked the Pentagon to stop the COVID-19 vaccination mandate for members of the state National Guard. The state officials say National Guard readiness could be impacted if troops quit or get kicked out.

• Illinois: The Illinois Veterans' Home in Quincy is reporting an increase in COVID-19 cases among its residents and staff. Tests this week found 16 residents and 10 staff members who had the virus. Most of the positive residents had mild symptoms.

More U.S. automakers have been making strides in recent years to produce electric vehicles, and U.S. officials have encouraged prospective car buyers to choose these vehicles through tax credits. But a recent survey shows that most consumers would prefer another type of incentive. 

Researchers from George Washington University found that many car buyers would prefer to get an immediate rebate at the point of sale after buying an electric car. 

"The current federal electric vehicle tax scheme is a pain," said study co-author John Helveston. "First of all, you have to have money. You have to be wealthy enough to buy the whole car and then wait for your tax-break kickback in April. But if you're not in that class of buyers, you often need the money when you buy the car or you're not going to buy it. Our study shows that an immediate rebate at the point of sale would be more equitable and potentially more effective in broadening the buying market for electric vehicles."

Immediate rebates over tax credits

The researchers conducted a national survey that asked prospective car buyers if they would prefer a tax credit, a tax deduction, a sales tax exemption, or an immediate rebate for purchasing an electric vehicle. 

They found that respondents "overwhelmingly" preferred the rebate option, valuing it by an average of $1,450 more than a tax credit. While that sounds like a lot, the team found that the valuation was nearly doubled among lower-income households, used vehicle buyers, and buyers with lower budgets. 

"If you gave the incentive to car buyers as cash on the hood, our study found that you could lower the subsidy by almost $1,500. That's how much people value immediacy," said lead author Dr. Laura Roberson. "So $7,500 in April when I file taxes is the same to me as $6,000 if you gave me that money at the point of sale. That's a huge difference in valuation."

The researchers estimate that the federal government could have saved around $2 billion if a federal subsidy had been available for electric vehicles between 2011 and 2019 and it was delivered as a rebate instead of a tax credit. The team believes spurring wider adoption of electric vehicles could be more possible if incentives are aimed at a wider range of consumers. 

"All the incentive money that we've been spending to try to get people to buy electric vehicles, it's mostly gone to the wealthiest car buyers," Helveston said. "Our results suggest that structuring incentives as immediate rebates would deliver a greater value to customers, be more equitable, and accelerate electric vehicle purchases in the United States."

The full study has been published in the journal Environmental Research Letters.

It didn’t take long after Netflix CEO Reed Hastings hinted that low-end, ad-supported plans might be on their way for the streaming platform to make a move.

On Wednesday, Netflix announced that it is partnering with Microsoft on a “lower priced,” ad-supported plan for consumers that will be offered in addition to its three tiers of ad-free plans. Microsoft’s role in the partnership will be to manage sales, advertising technology, and privacy protection.

“It’s very early days, and we have much to work through,” said Netflix COO Greg Peters. “But our long-term goal is clear: More choice for consumers and a premium, better-than-linear TV brand experience for advertisers. We’re excited to work with Microsoft as we bring this new service to life.”

In the company’s announcement, no actual prices for the service were mentioned.

Netflix took it on the chin a bit in April when quarterly results showed a loss of 600,000 subscribers in the U.S. and Canada. Its quarterly profits were slightly down, sending its stock value falling as much as 25% in after-hours trading. 

Consumers who rented homes in June encountered sharply higher costs for shelter. The cost of renting pushed the Consumer Price Index (CPI) up last month to the fastest rate since 1986.

The part of the CPI that measures rent increased by 0.8% from May to June. Over the last 12 months, rent prices have increased by 5.8%.

Economists warn that rental costs will probably keep going up because so many people who would like to purchase a home have been priced out of the market by sharply higher mortgage rates.

“As a result of historically low housing affordability, many Americans have moved into rental properties in an effort to wait out the housing market, limiting demand,”  Chase Gardner, a researcher at Insurify, told ConsumerAffairs. “While rent prices are also rising across the country, they aren’t growing at quite the rate that home prices have over the past several years, so renting remains a better housing option for many Americans.”

That’s especially true in expensive housing markets like New York and San Francisco. But a new report from the Harvard Joint Center for Housing Studies points to rising rents as another pressure point for consumers coping with rising inflation.

Rents rose 12% in the first quarter

The report found that rents were up 12% in the first quarter of 2022, with increases in several metro areas exceeding 20 percent. 

“Rents for single-family homes rose even faster, pushed up by increasing demand for more living space among households able to work remotely,” said Daniel McCue, a senior research associate at the Center. “Adding to the pressure, investors moved aggressively into the single-family market over the past year, buying up moderately priced homes either to convert to rental or upgrade for resale.”

Gardner says a recent Insurify study on the relative affordability of renting vs. buying a home in hundreds of U.S. metropolitan areas found that housing prices can vary more extremely than rent prices city-to-city.

“So home values in an expensive location are likely to be disproportionately higher than expensive rent prices when comparing each to their respective national average,” he said.

In more affordable markets like Montgomery, Ala., or Memphis, Tenn., Gardner said purchasing a two-bedroom home may be more affordable than renting one.

If you're interested in learning more about which states offer the best prices for renting, check out ConsumerAffairs' guide here.

Nissan North America is recalling 180,176 model year 2020-2022 Frontiers and Titans.

The transmission parking pawl may not engage when the vehicle is shifted into park, which can result in a vehicle rollaway.

A vehicle rollaway increases the risk of a crash.

What to do

A remedy is currently under development to fix this issue. Interim owner notification letters are expected to be mailed on July 20, 2022. Second letters will be mailed once the remedy is available.

Drivers are advised to apply the parking brake every time they park their vehicle.

Owners may contact Nissan's customer service at (800) 867-7669. Nissan's number for this recall is R22A2 R22A3.

Ford Motor Company is recalling 48,924 model year 2021-2022 Mustang Mach-Es.

The high voltage battery main contactors may overheat.

An overheated high voltage battery contactor may cause the vehicle to lose drive power, increasing the risk of a crash.

What to do

Dealers will update the onboard software free of charge.

Owner notification letters are expected to be mailed on July 18, 2022.

Owners may contact Ford customer service at (866) 436-7332. Ford's number for this recall is 22S41.

Deskins Candies of Bluefield, W.Va. is recalling Deskins Candies Peanut Butter Fudge, Deskins Candies Peanut Butter No-Bake, Deskins Candies Peanut Butter Pinwheel, and Deskins Candies Chocolate No-Bake.

The products may be contaminated with salmonella. There have been no confirmed illnesses to date.

The following products, which come in a 16-oz clear plastic clamshell with coding on the top of the package beside the label, are being recalled:

• Peanut butter Fudge, UPC 7 33980 12311 7, expiration date 6/26
• Peanut butter No Bakes, UPC 7 33980 12331 7, expiration date 6/21
• Peanut butter Pinwheel, UPC 7 33980 12314 7, expiration date 6/16
• Chocolate No Bakes, UPC 7 33980 12334 7, expiration date 6/26

The recalled products were sold at Merchants Distributor in Hickory, North Carolina; Krogers in Salem, Virginia; Grants Supermarkets in West Virginia and Virginia; and Goodsons Supermarkets in West Virginia.

What to do

Customers who purchased the recalled products should not consume them. Instead, they should discard or return them to the place of purchase for full refund.

Consumers with questions may contact the company by phone at (304) 324-1938 Monday through Friday from 8:00 a.m. to 4:00 p.m. (EST).

General Motors is recalling 235 model year 2022 Cadillac XT6 vehicles.

The brake fluid reservoir cap may be missing the warning label.

Without a warning label, the brake fluid may be unintentionally contaminated by debris. This can affect brake performance and increase the risk of a crash.

What to do

Dealers will inspect the brake fluid reservoir cap and replace it -- if necessary -- free of charge.

Owner notification letters are expected to be mailed on July 18, 2022.

Owners may contact Cadillac customer service at (800) 458-8006. GM's number for this recall is N222369130.

Late last year, the Biden administration vowed to increase benefits from the Supplemental Nutrition Assistance Program (SNAP) by 30% to help Americans who were struggling to afford healthy meals. Now, it looks like that move might have an even bigger impact than previously thought. 

Findings from a 14-year national study show that states with more generous SNAP policies and more participation have lower rates of children being involved in Child Protective Services (CPS) and being sent to foster care. 

"We knew that SNAP had an important role in alleviating food insecurity and hunger among children. Our findings suggest that investments in SNAP may be of even greater value to the health of children than we knew," said lead author Michelle Johnson-Motoyama. 

Win-win for families and states

The study results show that a 5% increase in the number of families receiving SNAP benefits was linked with between 7.6% and 14.3% fewer state CPS and foster care caseloads. Additional SNAP benefit generosity was also correlated with 352 fewer child maltreatment reports accepted for CPS investigation per 100,000 children.

“That’s a large reduction in potential child maltreatment. We were particularly surprised by how robust the findings were to other potential factors that could have explained these effects,” said Johnson-Motoyama. 

While the positive impact on families and children is paramount, the researchers say states that are more generous with SNAP benefits also stand to gain financially. 

“The costs of having children involved with CPS and placing them in foster care are tremendous,” Johnson-Motoyama stated. “Providing people with nutrition benefits is far less expensive and can save states quite a bit of money.”

These findings couldn't come at a more important time for the SNAP program because the federal COVID-19 emergency declaration that boosts its benefits is set to expire this month. That could lead to a lot of hardship for consumers who rely on the program.

“That could add a lot of stress to families with limited resources who rely on the program to help provide meals. Our study suggests that could harm children and increase the workload of CPS workers,” Johnson-Motoyama said.

Parents of picky eaters often have to work around their kids' palates to get them the nutrition they need. But findings from a recent study show that catering to their emotional needs might also do the trick. 

Researchers have found that a child's emotions can influence their eating patterns and diets. Specifically, they say negative emotions can be linked to overeating and choosing unhealthy foods.

"We found fried food consumption to be higher on days with more variable emotional patterns than days with consistent low negative mood," said Christine Hotaru Naya from the University of Southern California. "These results align with other studies that have found the negative mood to positively predict children's fatty food intake."

Negative emotions linked to poor eating

The researchers surveyed nearly 200 young children in California through the use of a mobile app. The participants were asked several times a day how they felt emotionally and what foods they consumed.

By the end of the study period, the researchers identified several negative mood patterns that contributed to poor eating. They found that the children experienced at least one of those patterns -- stable low negative mood -- on 90% of the days of the study. 

Breaking it down by the time of day, the team said early in the morning and during the evening were two vulnerable times when negative emotions could influence kids' food choices. 

"Children are more likely to consume unhealthy foods on weekends when meals and snacks are less structured and supervised than on school days," added Naya. 

"More studies are needed for us to understand the relationship between a child's emotions and their food choices, but this is a good start on that path to recognizing how to approach food choices with a person's mood and emotions in mind."

For economists, Amazon’s Prime Day is more than just a sales promotion by the nation’s largest online retailer. It could be the canary in the coal mine.

The annual shopping event is under much scrutiny this year because of growing recession worries. On the final day of Prime Day, the government reported the worst inflation numbers in 41 years. So, how consumers behave during this sales event could say a lot about where the economy is right now.

The initial numbers present a mixed picture. Numerator is a market research and data firm that tracked results from the first 32 hours of Prime Day. The numbers showed that consumers were spending, but they aren't going overboard.

So far, the average order is $53.14, which is slightly higher than last year’s $47.14 average. Of those orders, 42% totaled no more than $20. About 13% of orders were $100 or more.

Shoppers are showing restraint

Those numbers are fairly encouraging for economists concerned about a recession. Fifty-two percent of households shopping on Prime Day have placed at least two orders so far, while 9% have logged at least five orders.

The average Prime Day spending per household is currently $117, with 16% of shoppers spending more than $200.

It should be noted that Prime Day is not a gauge for the overall population. Prime, after all, is a subscription service that carries a $14.99 a month fee. That said, consumers who receive some qualifying government assistance can get a Prime membership for $6.99 a month.

Many shoppers are mindful of inflation

Economists who are focused on inflation would prefer to see restrained spending. The Federal Reserve’s policy of aggressively raising interest rates is aimed at dampening consumer demand, which over the last few months has helped fuel inflation.

Those economists may be cheered by data collected by Numerator. In its survey, 83% of Prime Day shoppers said inflation and rising prices influenced their Amazon purchases. In fact, 33% of shoppers said they purposefully waited until Prime Day to make a purchase in order to get a lower price.

Others – nearly 20% – said they used the sale to stock up on items they needed. Another 27% admitted to passing up a purchase that was a great deal but not really necessary.

With hours to go before Prime Day 2022 ends, “household essentials” is the leading category of purchases, earning nearly a third of all orders. Health and beauty products make up 27% of orders, followed by consumer electronics at 27%.

Inflation roared ahead in June, rising 1.3% from May and 9.1% over the last 12 months. The Labor Department’s Consumer Price Index (CPI) showed higher costs in just about every sector of the economy.

Not surprisingly, the indexes for gasoline, shelter, and food were the biggest drivers of inflation last month. The energy sector was up 7.5% and contributed to nearly half of the increase. Within the energy category, gasoline was up 11.2%.

In comparison, food prices were fairly subdued. The food index rose 1% from May. Over the last 12 months, food purchased in grocery stores is up 12.2% while food consumed away from home, such as at restaurants, has increased far less – by 7.7%.

The cost of a new vehicle rose 0.7% from May to June. At the same time, the price of a used car or truck increased at more than twice that rate – 1.6%.

‘Pretty sticky’

Inflation has been rising at an increasing pace since the start of 2022. Chris Motola, economic and financial analyst at MerchantMaverick.com, says the underlying causes of inflation may not disappear soon.

“It's pretty sticky from the looks of it,” Motola told ConsumerAffairs. The (Fed’s) rate hikes may cause some demand destruction, but remember that a lot of the problems are still on the supply side. In aggregate, though, we're looking at elevated prices for the foreseeable future.”

“No one can predict how long the record-high inflation rates will last, but we know now by now that it isn't transitory,” Mark Spitz, CEO at CPI Financial, told us. “The ongoing war in Ukraine coupled with the pandemic lockdowns that are resurfacing in various parts of the world means that the food production and energy sectors will continue to get rocked.”

Motola says resolving the nagging issues in the supply chain will do more to bring inflation under control than a Fed policy of raising interest rates.

“Rate hikes may make a small dent while playing chicken with recession, but ultimately the issues constraining supply need to be resolved, whether that's related to COVID shutdowns, supply chains, or supply disruptions and sanctions related to the war in Ukraine,” he said.

You can add the cost of homeowners’ insurance to the list of life’s necessities that keep getting more expensive.

We recently wrote that homeowners should review their insurance policies to ensure they have enough coverage to offset the effects of inflation. Now, it turns out the cost of the insurance policy itself is going up.

A new report from Policygenius shows that the cost of a home insurance policy outpaced the inflation rate from May 2021, to May of this year. While the official inflation rate clocked in at 8.6% during that time, home insurance premiums rose much faster – at 12.1%.

The study found that the cost increase for the typical policy increased faster than inflation in all but one state. Thirteen states saw the average premium rise more than 50% higher than the current inflation rate.

From May 2021, to May 2022, 90% of homeowners saw their quoted annual premium increase. For those whose premiums went up, the average increase was $134.

Higher building and repair costs

Reasons for the sharply escalating premiums vary. One reason is the staggering rise in building and repair costs over the last few years. Many policies offer some inflation adjustment protection, and insurance underwriters are raising premiums to reduce their risk.

The study also found the following:

• In multiple states, home insurance costs have increased at more than double the rate of inflation. Over the past 12 months, home insurance premiums are up as much as 18.5% in Arkansas, 18.1% in Washington, and 17.5% in Colorado, increasing by more than twice the rise of inflation during that same period.

• New York was the only state in Policygenius' analysis with a premium increase that was lower than the inflation rate, at 8%. Homeowners in New York saw the lowest increases at renewal since last year, with an average premium hike of just $56.

• Oklahoma saw the largest premium increases, with policyholders seeing their premiums go up $257 on average.

Shop around

Pat Howard, a licensed property and casualty insurance expert at Policygenius, points out that home insurance coverage and premium amounts are based on the rebuild cost, which considers the price of lumber, roofing, contractors, and anything else that goes into building a home.

"It's important for consumers to know there are multiple ways to lower your premium, including regularly re-shopping your home insurance, bundling insurance policies, or installing smart home devices," he said.

An easy way to compare your current home insurance premiums with the most competitive in the industry is to check out the ConsumerAffairs Buyer’s Guide to Best Homeowners Insurance Companies.

Toyota Motor Engineering & Manufacturing is recalling 661 model year 2023 Subaru Solterra and Toyota BZ4X vehicles.

The hub bolts on the wheels may loosen, causing a wheel to detach from the vehicle after low-mileage use.

A wheel detaching from a moving vehicle can result in a loss of vehicle control, increasing the risk of a crash.

What to do

Owners are advised not to drive their vehicles until they are repaired. A remedy for the issue is currently under development.

Letters notifying owners of the safety risk were expected to be mailed in June, and a second letter will be sent once the remedy is available.

Owners may contact Toyota's customer service at (800) 331-4331 for more information.

Yamaha Motor Corporation U.S.A. of Cypress, Calif., is recalling about 3,500 model year 2021 and 2022 Kodiak 700 All-Terrain Vehicles (ATVs).

The vehicles are missing the “Maximum Loading Limit” label, which could cause loads and tongue weights that are too heavy for the vehicle’s trailer towing and hitch. This increases the chances of a crash and injuries; however, no incidents or injuries have been reported.

This recall involves model years 2021 and 2022 Kodiak 700 ATVs, model number YWF700 FWB. KODIAK 700 is printed on the sides of the vehicle and the model number under the seat near the air cleaner.

The ATVs, manufactured in Japan, were sold at Yamaha dealers nationwide from October 2020, through April 2022, for between $10,500 and $11,500.

What to do

Consumers should immediately stop using the recalled ATVs and contact Yamaha to receive a trailer towing and hitch weight label. The company is mailing the label with application instructions directly to consumers.

Consumers may also contact an authorized Yamaha ATV dealer to schedule a free label application. Yamaha is contacting all registered owners directly.

Consumers may contact Yamaha online or by phone at (800) 962-7926 for more information.