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Update on the Stimulus Package: Strong Job Growth Reduces the Likelihood of Stimulus Checks in 2022.
Many customers are wilting under the weight of inflation these days. Americans are having a harder time than usual making ends meet as the cost of everything from transportation to groceries to clothing rises.
In fact, some people are still hoping that a second stimulus cheque would arrive in their bank accounts in 2022. However, given the current state of the economy, this is improbable.
The number of people employed is increasing.
The US economy added 678,000 non-farm employment in February, considerably exceeding economists’ projections of 440,000 new jobs. Furthermore, the national jobless rate dropped to 3.8 percent last month. That is the lowest unemployment rate since the start of the pandemic.
Even if inflation is forcing many Americans to suffer, it’s difficult to make the argument for a fourth stimulus check because the economy is doing so well right now and the labor market is so full with jobs. In fact, inflation, strangely enough, is a sign of a thriving economy.
The fact that there is currently more demand for things than supply is a major factor driving up the cost of goods. And if it weren’t for the fact that more people have money to spend, that demand wouldn’t exist.
Similar patterns can be seen in the home-buying and renting markets. On a nationwide level, home prices are rising because there are more potential buyers than available inventory. Similarly, rental demand has exploded in the last year, placing landlords in a position where they may charge a premium to tenants.
A glaring omission
Our current economic condition is undeniably complicated. On the one hand, employment creation is robust. Wage growth, on the other hand, isn’t keeping up with inflation, so many consumers feel left behind (and to be clear, many are doing just that).
While it’s tempting to use present conditions as a rationale for greater stimulus spending, the reality is that it’s difficult to do so. That isn’t to say that lawmakers aren’t willing to help.
President Biden committed in his recent State of the Union speech to keep advocating for the extension of the expanded Child Tax Credit, which helped millions of children escape poverty last year. If no extension is granted this year, the credit will be capped at $2,000 per qualified child. That’s down from $3,000 per child between the ages of 6 and 17 in 2021, and $3,600 for children under the age of 6.
Biden also discussed boosting the federal minimum wage, which has remained at $7.25 per hour for more than a decade. He also wants to implement initiatives that will help working parents with daycare expenditures.
All of these actions are obviously not the same as issuing another round of stimulus checks. However, they might serve a similar purpose: assisting low-income Americans in stabilizing their finances and better managing their expenditures at a time when everything is becoming increasingly expensive.
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