Photographer: Graeme Sloan / Bloomberg
Photographer: Graeme Sloan / Bloomberg
President Donald Trump’s decision to maintain the pandemic relief just before Christmas threatens to cause hardship for millions awaiting unemployment benefits and stimulus checks, further complicating an already unstable event. economy.
From Trump reluctance to sign a $ 900 billion bipartisan stimulus package that Congress approved Monday, along with its push for a new one, comes in the same way that special pandemic unemployment benefits are about to expire for up to 14 million people. The funds were included in an expense bill that a government would also risk closing if you don’t subscribe to the law, with millions of contractor positions at stake.
It could be a month before people receive their funds and even later for the effects to seep into the economy, according to Michael Englund, chief economist at Action Economics LLC.
Beyond the short-term impact, the lack of immediate direct payments and the gap in special unemployment benefits threaten to deepen the economic scar marked especially by a jump in long-term unemployment.
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“There will be some skin in December,” Englund said by phone. “It’s likely that a lot of people will have the checks that will take place in the last week of December.”
Meanwhile, “people are reducing their savings” and additional curfews and closures will especially affect the services sector, Englund said.
Although House Speaker Nancy Pelosi plans a vote Dec. 28 on a bill to increase the size of stimulus controls to the $ 2,000 demanded by Trump, she urged the president to sign the bill. law already passed by Congress and that has additional financial aid, including forgivable small business loans. companies, complementary unemployment benefits, help tenants facing eviction and funds for vaccine distribution.
The delay, even if it ends up being only a few days, could hardly come at a worse time. Consumer spending and revenue fell more than analysts expected in November, while other data indicates that Americans are discounting your savings accounts, including previous profit cash.
Trump still has several days to sign or veto the bill, which went by a wide enough margin that Congress could overturn his veto unless dozens of Republicans changed their vote to avoid crossing the president.
Meanwhile, last week 803,000 Americans applied for state unemployment benefits, nearly quadrupling the pre-pandemic level. Even activity in the hot real estate market is cooling as home sales fell last month despite mortgage rates records minimums.
Nearly 4 million Americans have been unemployed for more than six months and research has shown that it becomes more difficult to get a job and these people are more likely to accept lower-paying jobs, reducing their expenses and future opportunities.
According to Diane Swonk, chief economist at Grant Thornton LLP, the withholding “adds insult to injury at a time when people are losing checks and already living on smoke.” “It simply came to our notice then. That’s 14 million people coming out of a cliff. “
– With the assistance of Anna Edgerton