Social Security’s grim future

A new analysis puts a dollar figure on the cuts Americans could potentially see to their Social Security benefits in 2033, when some analysts expect payroll taxes that flow into the program will no longer be enough to cover monthly payments to the nation’s retirees. Many Americans have heard about the potential for benefits to be cut a decade from now if no changes are made to the program. To put the impact in more real-world terms—and perhaps to prod policymakers to act sooner—a new analysis by the Committee for a Responsible Federal Budget, which calls itself a nonpartisan group “committed to educating the public on issues with significant fiscal policy impact,” calculated the potential hit to your annual benefits in dollars. The numbers aren’t pretty. —David E. Rovella

A slide in big tech and higher energy prices weighed on Wall Street sentiment ahead of inflation data that will help shape the outlook for the Federal Reserve’s next steps. The S&P 500 closed near session lows and the Nasdaq 100 dropped over 1%. Nvidia, which has more than tripled this year amid the artificial-intelligence frenzy, slipped almost 5%. Tesla, Apple and Amazon were all down. A 28% surge in European natural gas and an advance in oil to a nine-month high added to concern about further price pressures. Here’s your markets wrap.

China’s consumer and producer prices fell together for the first time since 2020, a deflation cycle that could give global central banks some help in fighting inflation in their own countries but signals a worsening outlook in the world’s second-largest economy. The consumer price index registered its first decline in more than two years, falling 0.3% in July from a year earlier, the National Bureau of Statistics said Wednesday. Producer prices fell for a 10th consecutive month, contracting 4.4%.

President Joe Biden signed an executive order limiting US investment in some Chinese firms, part of a push to restrict the Asian country’s ability to develop next-generation military and surveillance technologies that might threaten US national security. The order, announced Wednesday, would regulate US investments in some Chinese semiconductor, quantum computing and AI firms. The restrictions are the latest in a series of US actions that has complicated the Biden administration’s fraught relations with China, including export controls on semiconductor technology announced last year. Meanwhile, out on the 2024 campaign trail, the Democratic incumbent was touting policies he says are creating an American manufacturing renaissance. His lead opponent as of now, Donald Trump, now finds his allies supporting voting methods the Republican has falsely claimed are prone to fraud.

Elon Musk’s Twitter (now “X”) defied a judge’s order to comply with a Justice Department search warrant for records related to Trump’s account. Now Musk’s company has been fined.

A new platform to expand the reach of China’s digital yuan and other central bank digital currencies is moving closer to reality. The Beijing-backed digital prototype for sending money around the world without relying on US banks is advancing so quickly that some European and American observers view it as an emerging challenger to dollar-denominated payments in global finance.

Covid-19 hospitalizations are creeping up in the US for the first time this year as extreme heat keeps people indoors and protection against infection fades. Covid hospital admissions rose 43% in the last week in July from a low in the week ending June 24, according to Centers for Disease Control and Prevention data. While they’re still lower than at any other point over thee past three years, public health officials across the country are urging caution about increases. The virus that has killed millions across the globe still poses a deadly threat to the elderly and those with compromised immune systems, and can cause lingering long Covid symptoms even among those without risk factors.

UK Energy Secretary Grant Shapps is set to examine potential changes to the price cap on British household power and gas bills as part of a wider drive to restore competition to the sector. The cap—introduced in 2019 to protect customers from price-gouging—has now effectively become the universal energy price for consumers.

No place in the US has put inflation in the rearview mirror quite as fast as Minneapolis. In May, the Twin Cities became the first major metropolitan area to see annual inflation fall below the Fed’s target of 2%. Its 1.8% pace of price increases was the lowest of any region that month. That’s largely due to a region-wide push to address one of the most intractable issues for both the Fed and American consumers: rising housing costs. Well before pandemic-related supply-chain snarls and labor shortages roiled the economy, the city of Minneapolis eliminated zoning that allowed only single-family homes and since 2018 has invested $320 million for rental assistance and subsidies.

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