U.S. Economy On High Alert Over Shaky Future Of Extra Jobless Benefits

As Congress debates whether to renew supplemental unemployment benefits for people thrown out of work by the pandemic, new research shows those benefits offer a critical boost for the U.S. economy.

8/7/2020 12:25:00 AM

Researchers say unemployment benefits have helped sustain the U.S. economy by giving people extra spending power. They've also helped families avoid sinking into debt: Overall borrowing went down and late credit card payments fell nearly 40% this spring.

As Congress debates whether to renew supplemental unemployment benefits for people thrown out of work by the pandemic, new research shows those benefits offer a critical boost for the U.S. economy.

Justin Sullivan/Getty Imagestoggle captionJustin Sullivan/Getty ImagesThe extra $600-a-week unemployment benefit has kept jobless people from plummeting into further debt and has allowed for sustained spending, a boon for the struggling economy.Justin Sullivan/Getty Images

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Updated at 9 a.m ETOrdinarily when people lose their job, they spend less money. Butsomething unusual happened this springwhen tens of millions of people were suddenly thrown out of work by the coronavirus pandemic.At first, their spending did go down, just as you would expect. But it quickly rebounded, once people started to receive unemployment benefits, which the federal government had boosted by $600 per week. Jobless people who received those benefits wound up spending more on the whole than they had before the pandemic.

"Unemployment benefits have been absolutely transformative for the households that have been able to receive them during this crisis," said Peter Ganong, who studied the spending patterns along with colleagues from the University of Chicago and the JPMorgan Chase Institute."It actually turns out that they're helping to sustain the U.S. economy as a whole."

That could be an important consideration as Congress debates whether to renew some form of extra aid for the unemployed as part of a new coronavirus relief package.The Labor Department reportednearly 1.2 million additional claimsfor state unemployment last week, plus another 656,000 claims under a special federal program for gig workers and the self-employed who are ordinarily not eligible for benefits. As of mid-July, more than 31 million people were receiving some form of unemployment insurance.

The End Of $600 Unemployment Benefits Will Hit Millions Of Households And The EconomyNicholas Mancuso lost his job at a metal fabrication plant in upstate New York in March. He went about two months with no income and fell behind on his rent. But once his unemployment benefits finally started flowing, Mancuso suddenly had more money to spend than he did when he was working.

"You just have a little bit more security," Mancuso said."You feel a little bit more comfortable. You can pay your bills and still have money. If you needed a pair of sneakers, you can go buy a pair of sneakers."That extra spending power is not only good for sneaker salesmen, but for landlords and grocers as well. Consumer spending is a key driver of the broader U.S. economy.

As of last week, though, the extra $600 in federal help for the unemployed has run out. Mancuso's weekly benefit dropped from $873 to $273. He used the last of his extra federal money to pay this month's rent."If I had a $500 emergency right now, I'd be in trouble," Mancuso said."If something happened to my car, I wouldn't be able to fix it."

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That is the half full prediction. It's going to be much worse as the snowball from hell gains momentum. So many awful dominos falling will make Americans yearn for July unemployment numbers. Nancy Pelosi is queefing at the thought of a ruined economy as Bill Maher masterbates furiously in his Porsche realDonaldTrump DonaldJTrumpJr TuckerCarlson seanhannity SpeakerPelosi billmaher Trump2020LandslideVictory please God 🙏

ButterflyLove_8 This will paralyze the economy and promote crime. This rep senate is the worst in our history. Federal Pandemic Unemployment Assistance💲has been withheld (2Months+) from AZ Citizens. Someone in DC should hold dougducey & ArizonaDES accountable for this Corruption CC: VP RepDavid USTreasury TheJusticeDept seanhannity RepAndyBiggsAZ SenatorSinema SenMcSallyAZ

You mean we all weren't just stashing that 600 in a shoe box under our bed and bragging about not working? Weird And then, what will be the monthly jobs report in Oct? Unempl claims through Oct? Nearly every dollar of the $600/week went right back into the economy. Wait until the August 's come out. They won't be good.

This is exactly what I don’t understand about the GOP position. Or people could go back to work. Isn't the House still away from DC? Andreavedmonds We need more than just $600.. we need ongoing EmergencyMoneyforthePeople we're only pawns in their cruel, sadistic game. Isn't that the Republiklan game plan all along? Every Republiklan since 1900, except for TR and Ike, have destroyed the economy on the way out the door and left the Democrats to clean up the mess.

Well...Ms. Pelosi said it best... This is just mind boggling that GOP senatemajldr don’t grasp this simple notion of economy .. if you stop the pay people aren’t magically getting back to work when there is none and no body is buying shit from shops so stores go bankrupt,millions of tons of food rots unsold.

Hey, I am one of the many....when will the tent cities and soup lines be set up? Good. Stop the nanny state and open our society. That $600 unemployment bonus has to go, but it should probably be tapered down to 0 over several weeks. I don’t think that the right wing realizes just how much that $600 a week has been propping up the economy. thanks to their negligence, we all get to witness the consequences of having that suddenly turn off like a switch. this is gonna hurt so many people. Goddamnitsomuch.

Sorry but senatemajldr is busy working on some more tax breaks and bailouts for his CEO pals - like a real American. The 4th quarter for most brick & mortar businesses might be a disaster this year If there’s one thing the GOP excel at, it’s ruining the economy and exploding the deficit. So, no doubt they’ll continue to fight the $600 in service if fighting “big gov” while the feds are snatching up citizens.

SenatorLankford 'at least some of the extra $600'....but I've been told by most of the media that if people don't get the full $600, they won't be able to afford their prescriptions and will face eviction Nancy needs money for weed and illegals Tell as much to Mitch McConnell and Mark Meadows, since those two can't seem to figure that out!

$2400 A MONTH to stay home, what do you think this is Europe? Why don't they get a job? What do they need extra for? Because of President Trump’s tax cuts, over 500 companies used those savings to fund bonuses and wage increases for their workers. Welp, I'm going into zero spending. Probably millions will do something similar. Good luck with that economy & September Jobs report gop fuckers.

So if they started spending more why are so many not paying rent? This is what the Republicans don’t want and the real reason they won’t extend the benefit. The banks/cc companies make their money when people don’t pay their balance in full or on time. Then you need new researchers. I have yet to hear if the $600/ wk federal money is TAXABLE. Where I live unemployment benefits are taxable income.

BigFIN are not pleased with this result. They are served by keeping the poor subjugated and forever indebted. Unemployment benefits helped so Republicans want to end them. Typically selfish and stupid. Elections have consequences. Best of luck, y'all. And those of us who worked through the whole pandemic are still in debt, still making less money, and still fighting to pay our bills, yet we are so essential. We need and deserve our HazardPay.

even middle class people have no idea that people pay bills late (or not at all) is because they are struggling to afford food for their families. but assholes still think they buying rims and shoes ⚠️ The financial industry makes A LOT of money off increased borrowing and late payments. Notice who is against continued pandemic aid to families? Follow the lobbyists.

Funny how the banks always get theirs. SaveThe600 because it benefits our economy. It's almost as like people got into debt because they couldn'tt afford to live a decent life, and they couldn't pay off that debt because of the samething, now suddenly they have extra cash and they are paying bills and being responsible....Folks want to do the right thing.

The extra money has mostly subsidized laziness. Recipients would rather drink beer all day instead of finding a job. People should not be collecting more money NOT working then actually working PERIOD It's almost as if paying everyone a living wage is, uh, good for the economy. The federal minimum wage needed to be raised to $15/hr five years ago.

Congress isn't interested in data and facts unless it fits their agenda. I paid off two CCs in June thanks to the extra $$$

Stock market live updates: Dow futures down 100, jobless claims ahead, Roku falls 5%Stock futures moved slightly lower early Thursday as investors awaited weekly jobless claims data. Has anyone noticed the dramatic change in guests in recent times? CNBC had always put forth the best minds in the financial community. There main concern now appears to be promoting a prominent ethnic blend with their guests. We deserve the best minds in finance I’m worried with futures being in the red! 😭 You have become a safe haven for Republican politicians to speak endlessly without interruption or get tough questions. Raise your journalism game please.

Lapse in Extra Unemployment Benefits to Hurt U.S. Recovery, Economists SayMany economists expect last week’s expiration of $600 in enhanced weekly unemployment benefits to lead to a sharp drop-off in household spending and a setback for the U.S. economy’s near-term recovery. get a job I’m not an economist and I could also predict that. BuT tHeN they WOnT lOoK foR wORk (that doesn’t exist).

U.S. Jobless Claims Fell to 1.2 Million in Aug. 1 WeekFilings for jobless benefits fell to 1.2 million last week, a sign layoffs declined as the labor market tries to recover Only 1.2 million huh? Sounds like an amazing rebound. Watson2038 Or trying to predict this number in a pandemic is a fool’s errand Or...maybe the decline was all the small business owners and gig workers giving up in futility because they won’t be receiving anything.

Some Americans could lose unemployment benefits with eligibility requirements changingMany jobless Americans will soon have to meet one more requirement to be eligible for their unemployment benefits.

California lawmakers ask Newsom to act immediately on unemployment claimsMore than half the members of the California Legislature called on Gov. Gavin Newsom to immediately begin paying unemployment benefits to jobless workers whose claims have been stalled in the system as the state works to clear a months-long backlog. With whose money? I’m an unemployed June grad. Applied March for UI after laid off in February. Told in June to apply for PUA, did, and told yesterday that my claim has not been reviewed yet. First time I got a person after calling for 5 months. Help. Will be evicted at end of month.

The $600 jobless benefit expired and stimulus talks are dragging—here's what to do if you can't pay your credit card billsAs stimulus talks drag on and the $600 jobless benefit expires, here's what to do if you can't pay your credit card bills amid the coronavirus pandemic. the people dont want another stimulus! we know we will pay it back 3X over SpeakerPelosi V recovery has arrived. The Spring Equinox has been predicted. Most of you poor people need to call JG Wentworth now