News of the Day

Social Security beneficiaries can expect to see an 8.7 percent increase in their monthly checks beginning in 2023. The figure is the highest cost-of-living adjustment (COLA) issued by the Social Security Administration in 40 years.

Each year, COLAs are automatically applied based on the Consumer Price Index for Urban Wage Earners and Clerical Workers.

Between 2010 and 2020, average annual COLAs increased by just 1.7 percent, while COLAs have only risen above 8.7 percent three times — between 1979 and 1981 at 9.9 percent, 14.3 percent and 11.2 percent, respectively.

For the average retiree, monthly benefits come out to around $1,656, and the 8.7 percent increase means these beneficiaries may see $144 extra cash in each payment, beginning in 2023.

Inflation at the wholesale level rose more than expected in September as prices for everyday necessities remain at a multi-decade high, squeezing businesses and millions of American households. The Labor Department said Wednesday that its producer price index, which measures inflation at the wholesale level before it reaches consumers, rose 0.4% in September from the previous month.

Overall, prices for goods jumped 0.4% last month after declining 1.1% in August. The bulk of the increase – about 60% – can be traced to a 1.2% monthly surge in prices for food, including a stunning 15.7% advance in the cost of fresh and dry vegetables, according to the Labor Department.

Energy prices, meanwhile, climbed 0.7%, despite a 2% drop in the cost of gasoline. That is largely due to the increase in the cost of diesel fuel, residential natural gas and home heating oil.

Meanwhile, the services index advanced 0.4% in September, the fifth consecutive rise. Most of the September increase can be attributed to a 0.6% rise in the index for final demand services excluding trade, transportation and warehousing. Prices for final demand transportation and warehousing services actually fell 0.2%.

Last Friday, the United States Postal Service filed notice with the Postal Regulatory Commission (PRC) of price changes to take effect January 22, 2023. The new rates include a three-cent increase in the price of a First-Class Mail Forever stamp from 60 cents to 63 cents.

If favorably reviewed by the Commission, the proposed increases will raise First-Class Mail prices approximately 4.2 percent to offset the rise in inflation. The price changes have been approved by the Governors of the U.S. Postal Service.

The price for 1-ounce metered mail will increase to 60 cents, and the price to send a domestic postcard will increase to 48 cents. A 1-ounce letter mailed to another country would increase to $1.45. There will be no change to the single-piece letter and flat additional-ounce price, which remains at 24 cents. The Postal Service is also seeking price adjustments for Special Services products including Certified Mail, Post Office Box rental fees, money order fees and the cost to purchase insurance when mailing an item.

The PRC will review the changes before they are scheduled to take effect. The complete Postal Service price filing, with prices for all products, can be found on the PRC website under the Daily Listings section at prc.gov/dockets/daily. The Mailing Services filing is Docket No. R2023-1. The price tables are also available on the Postal Service’s Postal Explorer website at pe.usps.com/PriceChange/Index.

Tens of millions of additional federal dollars are headed to Wisconsin to provide thousands of additional homes and businesses access to reliable, high-speed internet, the White House announced Thursday.

Speaking to reporters during a press call, Jacob Leibenluft, who leads a branch of the U.S. Treasury Department tasked with overseeing projects created by the American Rescue Plan, told reporters that $40 million for broadband infrastructure will be sent to Wisconsin — enough funds to connect an estimated 8,000 homes and businesses to high-speed internet.

That $40 million is just a portion of $189 million earmarked for Wisconsin through the Capital Projects Fund. The Capital Projects Fund is a $10 billion project created by the American Rescue Plan aimed at ensuring “that all communities have access to … high-quality modern infrastructure, including broadband,” according to the Treasury Department.

Joseph Wender, another Treasury Department official and director of the fund, said the remaining $149 million will be awarded at a later date after the department approves plans for how the money is going to be spent.

Public Service Commission of Wisconsin Chair Rebecca Cameron Valcq said the state plans to use at least portions of the remaining funds on “digital connectivity” and “multipurpose community facility” projects. She said those projects — which she did not offer more details about Thursday — are under review by the Treasury Department.

Two of Wisconsin’s largest utilities have reached a deal to recover half a billion dollars from customers through higher rates next year due largely to rising inflation, natural gas prices and costs tied to their clean energy transition.

We Energies and Wisconsin Public Service filed the proposed settlement Monday with the Wisconsin Public Service Commission. The utilities reached the deal with ratepayer and renewable advocacy groups, labor unions and businesses intervening in utilities’ requests to increase rates next year.

Under the settlement, the utilities would recover more than $507 million in expenses next year. We Energies would refinance $100 million of roughly $500 million that’s yet to be paid off from investments in pollution controls at the Oak Creek power plant. The deal also writes off customer late fees from the COVID-19 pandemic, reduces fixed monthly charges for ratepayers and extends a low-income forgiveness program.

“We think that this settlement is a real positive step forward for our customers. It’s a balanced approach to resolving the major issues in these various rate cases,” said Brendan Conway, the utilities’ spokesperson. “It allows us to continue our efforts to build a bright, sustainable future (and) provides customers with affordable, reliable and clean energy now and in the future.”

The utilities would recoup that $507 million next year through rate increases for consumers. We Energies is proposing to raise electric rates by 8.4 percent and natural gas rates by 10.7 percent beginning next year. WPS wants to increase electric rates 6.2 percent and natural gas rates by 8.3 percent.

According to the utilities, the rate hikes are largely tied to around $1.5 billion of investment in clean energy projects through next year. At the same time, utilities and customers are facing financial pressures related to soaring inflation and natural gas prices.

The settlement contains significant benefits for customers, according to ratepayer advocate the Citizens Utility Board. Tom Content, the board’s executive director, said that includes refinancing the remaining balance on the Oak Creek coal plant and a discount rate for low-income ratepayers on their bills as part of a new pilot program.

“There are cost increases that can’t be controlled, but there are significant savings opportunities in here,” said Content. “It leaves us the ability to continue to fight on the issue of high utility profits that have been too high for too long and are costing customers billions of dollars around the country every year.”

The PSC will have the final say over the proposed settlement, as well as utilities’ profit rates and how those costs will be spread among residential and industrial customers.

United States manufacturing activity grew at its slowest pace in nearly two and a half years in September as new orders contracted while interest rates were aggressively hiked to cool demand and tame inflation.

The Institute for Supply Management (ISM) said on Monday that its manufacturing purchasing managers’ index or PMI dropped to 50.9 in September, the lowest reading since May 2020, from 52.8 in August. A reading above 50 indicates expansion in manufacturing, which accounts for 11.9 percent of the US economy.

The ISM survey’s forward-looking new orders subindex fell to 47.1 last month, also the lowest reading since May 2020, from 51.3 in August. It was the third time this year that the index has contracted. Order backlogs are also being whittled down. While that pointed to a further slowdown in manufacturing, it was also a function of easing bottlenecks in the supply chain.

The ISM’s measure of supplier deliveries fell to 52.4 from 55.1 in August. A reading above 50 percent indicates slower deliveries to factories.

With supply chains loosening, inflation pressures at the factory gate continued to subside.

A measure of prices paid by manufacturers dropped to 51.7, the lowest reading since June 2020, from 52.5 in August. The continued slowdown is being driven by retreating commodity prices. Annual consumer and producer inflation decelerated in August, raising hope that prices had peaked.

The Supreme Court is beginning its new term,  and the public is back for the first time since the court closed in March 2020 because of the coronavirus pandemic.

On Monday, the court is considering an important water rights case that could limit federal regulation under the nation’s main water pollution law, the Clean Water Act.

Other significant cases include a controversial Republican-led appeal that could dramatically change the way elections for Congress and the presidency are conducted by handing more power to state legislatures. There’s also the case of a Colorado website designer who says her religious beliefs prevent her working with same-sex couples on their weddings. Next month, the justices will hear a challenge to the consideration of race in college admissions.

Wisconsin is likely headed for a big workforce shortage. Simply put: there aren’t enough young people here to replace the baby boomers who will turn 65 years old over the next decade.

A new study by Forward Analytics, a Wisconsin-based research organization that provides state and local policymakers with nonpartisan analysis of issues affecting the state, shows increased migration may be the only answer to the workforce shortage.

Dale Knapp has followed the trends for almost 25 years, so the stats from his latest analysis on Wisconsin’s workforce weren’t surprising.

“What you’ve got is a bigger baby boom generation than we thought, retiring over the next 10 years, and we don’t have enough young people coming up behind them to replace them,” Knapp, the director of Forward Analytics, said.

Figures from the 2020 census show that if 2010-2020 migration patterns continue, the number of working Wisconsinites will drop about 130,000 by 2030.

Data from federal income tax returns shows a trend from 2012 to 2020, with the state losing 106,000 so-called “families” with the tax filer under age 26.

Often, these are single individuals, which is the group Knapp said he hopes will return to Wisconsin someday.

“If we can get them here, they tend to stay here because they realize we have quality schools, an affordable cost of living, low crime, and we have a lot of great amenities,” Knapp said.

According to the study, Wisconsin could potentially build on those factors to attract those headed into their 30s and 40s, which are the typical family formation years when people want to move back to the Badger State.

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.”