A Picture of America's Income, Poverty and Healthcare Insurance in 2015

After nearly a decade of "stagnating incomes," Americans are finally getting a raise, the Census Bureau said Tuesday. In 2015, the typical U.S. household's income rose 5.2% to $56,516 compared to the previous year, but still fell short of the median household income of $57,423 in 2007 when the Great Recession began.

The median is still nearly 2% lower than it was in 2007, though the government's annual report on incomes and poverty paints the picture of an economy finally starting to benefit a broader range of Americans since the end of the recession in 2009. The median is also 2.4% lower than the robust peak of $57,909 the late 1990s.

The number of Americans living in poverty also fell sharply last year, dropping to 13.5% from nearly 14.8% and marking the largest decline in poverty since 1999. There were 43.1 million people in poverty last year, 3.5 million fewer than in 2014.

"For married-couple families and families with a female householder, both the poverty rate and the number in poverty decreased. For families with a male householder, neither the poverty rates nor the number in poverty showed any statistically significant change between 2014 and 2015," reports the Census Bureau.

The income gains and drop in poverty signal ongoing gains in the job market, according to Trudi Renwick, assistant division chief at the Census Bureau. About 2.4 million more Americans found full-time, year-round jobs in 2015.

Still, the overall increase marks the largest one-year rises since 1967 and the first annual increase in median household income since 2007.

"It's really a broad, broad increase in median incomes, and one of the largest increases... that we've ever had," said Renwick.

U.S. median incomes increased across all age groups, as well as for most ethic and racial groups, though the strongest gains were found in households with adults in prime working years.

"The real median income of Hispanic households increased by 6.1 percent between 2014 and 2015. Non-Hispanic white and black households also saw increases of 4.4 percent and 4.1 percent, respectively. While Asian households had the highest median income in 2015, the percentage change in their real median income was not statistically significant between 2014 and 2015. The differences between the 2014 to 2015 percentage changes in median income for non-Hispanic white, black and Hispanic households were not statistically different," the Census Bureau reported.

The Census Bureau also reported that the number of Americans without insurance coverage for 2015 decreased to 9.1%, or 29.0 million, down from 10.4%, or 33.0 million, for calendar 2014. These findings are contained in two reports: Income and Poverty in the United States: 2015 and Health Insurance Coverage in the United States: 2015. Several states took advantage of federal funding under the Affordable Care Act and expanded their Medicaid programs, while private-sector companies hired more workers and offered better benefits.

"Between 2014 and 2015, the increase in the percentage of the population covered by health insurance was due to an increase in the rates of both private and government coverage. The rate of private coverage increased by 1.2 percentage points to 67.2 percent in 2015, and the government coverage rate increased by 0.6 percentage points to 37.1 percent," the Census Bureau reported.

Wells Fargo & Company Cuts Sales Goals following Fake Account Scandal, $185M Fine

The Consumer Financial Protection Bureau (CFPB), Office of the Comptroller of the Currency and the Los Angeles City Attorney last week slapped Wells Fargo & Company (WFC) with a roughly $185 million fine for generating fictitious accounts over the course of five years. The CFPB will receive $100 million of the total penalties - the largest fine ever levied by the agency – while customers are set to receive $5 million.

The broader story is that bank employees allegedly created more than 2 million fake accounts in customers' names, going so far as to forge signatures, create phony email addresses and transferring funds between real and phony accounts.

Reports say that trouble started when Wells Fargo regional managers set daily quotas for their branch offices to "cross-sell" financial products such as savings accounts for customers opening a checking account. Buckling under the pressure of these quotas, employees began setting up the fake figures. It wasn't to a blind eye, however, and Wells Fargo says that within the last five years it has fired 5,300 bank employees for the improper conduct.

In preparations for a hearing on September 20, staff members for the Senate Banking Committee are "arranging briefings and collecting information from both Wells Fargo and the regulators," Torrie Matous, a spokeswoman for the committee's chairman, Richard Shelby, a Republican from Alabama, told Reuters.

It should come as no surprise, then, that Wells Fargo Tuesday issued an announcement that it will scrap all product sales goals in retail banking, effective January 1, 2017.

"Our objective has always been and continues to be to meet our customers' financial needs and drive customer satisfaction," CEO John Stumpf stated in the news release. "We are eliminating product sales goals because we want to make certain our customers have full confidence that our retail bankers are always focused on the best interests of customers.

"We believe this decision is both good for our customers and good for our business. The key to our success is the lifelong relationships that result from providing each customer with great value. For the past several years, we have significantly strengthened our training programs, controls and oversight and have evolved our model to ensure we are rewarding deeper relationships and providing excellent customer service. The elimination of product sales goals represents another step to reinforce our service culture, helps ensure that nothing gets in the way of our ability to achieve our mission, and is consistent with our commitment to providing a great place to work."

International Energy Agency Lowers Forecast for Global Oil Demand

The Paris-based International Energy Agency (IEA) Tuesday issued a forecast for slower growth in demand for oil this year, citing a "more pronounced" economic slowdown in the third quarter. The agency also said refinery runs for 2016 are on pace to grow at the lowest rate in 10 years.

The Oil Market Report (OMR) is a monthly International Energy Agency publication which provides a view of the state of the international oil market and projections for oil supply and demand 12-18 months ahead.

In its September report, the IEA said it believes global demand for oil will grow by 1.3 million barrels a day (mb/d) in 2016, a downgrade of 100,000 barrels compared to the previous forecast. The agency also forecast continued coasting through 2017 to 1.2 million mb/d, weighed down by uncertain "underlying macroeconomic conditions."

Also reported in the September OMR:

• World oil supplies fell by 0.3 mb/d in August, dragged lower by non-OPEC. At 96.9 mb/d, global oil output was 0.3 mb/d below a year ago, but near-record OPEC supply just about offset steep non-OPEC declines. Non-OPEC supply is expected to return to growth in 2017 (+380 kb/d) following an anticipated 840 kb/d decline this year.
• OPEC crude production edged up to 33.47 mb/d in August - testing record rates as Middle East producers opened the taps. Kuwait and the UAE hit their highest output ever and Iraq lifted supplies. Output from Saudi Arabia held near a record, while Iran reached a post-sanctions high. Overall OPEC supply stood 930 kb/d above a year ago.
• OECD total inventories built by 32.5 mb in July to a fresh record of 3 111 mb. As refinery activities reached a summer peak, crude oil inventories refused to decline until an exceptional storm-related draw hit the U.S. in late August.

The price of oil has plunged over the last two years as the market was unbalanced by an enormous supply and slower growth in demand.

For comparison purposes, key points from the August OMR are as follows:

• Global oil supply rose by about 0.8 mb/d in July, as both OPEC and non-OPEC production increased. Output was 215 kb/d lower than a year earlier, as declines from non-OPEC more than offset an 840 kb/d annual gain in total OPEC liquids. Non-OPEC production is forecast to drop by 0.9 mb/d this year before rebounding by 0.3 mb/d in 2017.
• OPEC crude oil output rose by 150 kb/d to 33.39 mb/d in July as Saudi Arabia pushed output to the highest ever and Iraq pumped more. Robust Middle East production lifted total OPEC crude supply 680 kb/d above a year ago and held output at an eight-year high.
• Global refinery throughput in the third quarter is expected to rise by 2.2 mb/d from a weak second quarter to a record 80.6 mb/d. At only 0.6 mb/d above a year earlier, third quarter runs will lag expected demand growth, eroding some of the product stock cushion built up since mid-2015. Runs are forecast to decline seasonally to below 80 mb/d in the fourth quarter of 2016.
• An OECD inventory overhang continued to shift from crude into products during June, with commercial stocks swelling by 5.7 mb to a record 3 093 mb. Declines in crude oil holdings were offset by an above average product build of 15.9 mb, with big volumes of US propane and other NGLs moving into storage.

U.S. Budget Deficit Deepens YoY to $107 Billion in August

The federal government recorded a deficit of $107.1 billion in August, $43 billion more than August 2015, the Treasury Department said in a monthly report Tuesday. The increase is largely driven by government spending on entitlement programs such as Medicare, Medicaid and Social Security.

The August figure is slightly lower than the $112.8 billion July deficit, though over the past 12 months the deficit reached $530 billion, an increase of 25% from a year earlier. With just one month left in this budget year, the Treasury Department says the deficit totals $620.8 billion, up 17.1% from the same period a year ago.

While revenue from income taxes has increased 4% this fiscal year thanks to a higher number of Americans with jobs and income increase, corporate-tax revenue has fallen 11% reflecting lower corporate profits due to a strong dollar, weak global economic growth and slow productivity gains.

The government's fiscal year runs from October through September. The Congressional Budget Office last month revised its estimate for the 2016 deficit up sharply to show an imbalance of $590 billion, or about $152 billion more than last year.