In March of 2021, when the American Rescue Plan was finally signed into law, the economy of the United States was still in a somewhat precarious position.
Not only was there a widespread lack of employment opportunities, but in the absence of a COVID-19 vaccination, many people were unable to return to work safely.
The current state of our economy, on the other hand, is markedly better than it was in the past regarding the availability of jobs.
And even though a lot of individuals are having trouble making ends meet because of rising inflation-related expenditures, a fourth federal stimulus check shortly is quite improbable due to the situation of the labour market.
Jobs Are Plenty
The United States economy added a staggering number of 528,000 jobs in July, which was significantly higher than the 250,000 new jobs that analysts had predicted it would add.
Because of these newly created employment opportunities, the United States has now fully recovered all of the jobs it lost as a result of the pandemic. In addition, the national unemployment rate has reverted to the level it was before the epidemic, which is 3.5%.
When it is tough to find work and the unemployment rate is significantly higher than it typically is, it makes perfect sense to authorise another round of stimulus payments.
However, when employment is strong, it is quite difficult to justify providing assistance of that nature. Because of this, citizens of the United States should not anticipate receiving payments from the federal stimulus programme any time shortly.
If a recession were to occur, would stimulus checks still be distributed?
Economists have been sounding the alarm for several months now, expressing concern that a recession may be on the horizon.
To bring down the rate of inflation, the Federal Reserve has been steadily increasing interest rates. The worry, on the other hand, is that expensive borrowing would lead to a significant reduction in consumer spending, to the point where it will have an effect on businesses and push them to go ahead and lay off employees.
If there is an imminent economic downturn that leads to a significant increase in the number of people without jobs, then there may be another wave of stimulus spending.
Since legislators have historically relied on stimulus cheques to inject money into the economy during other types of recessions besides those caused by the epidemic, it is logical to suppose that they would potentially do the same thing if the circumstances truly merited it.
On the other hand, that is not a circumstance that anyone ought to want. Inflation may be already making life challenging for a lot of people right now, but a significant economic downturn with widespread unemployment might make things an order of magnitude more difficult.
As a result, expecting the federal government to launch yet another wave of stimulus spending is analogous to anticipating the worst possible outcomes for the economy.
Having said that, several states are currently handing out stimulus checks this summer as a result of having excess money in their state budgets. It should be obvious that this is not the same thing as assistance provided on a national level. However, despite this, it is still beneficial.
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In the meanwhile, we should expect to see inflation start to drop to a more manageable level as a result of the Federal Reserve’s activities, which caused borrowing costs to rise, and supply chains slowly but surely catch up to rising consumer demand.
It’s possible that this won’t happen in the next month or two, but by the end of the year, shoppers might feel a little bit better. For the time being, all that can be asked of you is to keep your composure.
