Stimulus Check Update: Improving Jobs Data Could Make a Fourth Stimulus Check Less Likely
by Maurie Backman | Published on Aug. 9, 2021
Recent news on the unemployment front means another stimulus check may not happen this year.
Will a fourth round of stimulus checks hit Americans' bank accounts this year? That's something a lot of people want to know. And while it's too soon to say definitively whether there will or won't be another windfall, recent unemployment data tells us that the chances of another round are getting slimmer.
The jobless rate just dropped
In July, the national unemployment rate fell to 5.4%, down from 5.9% in June. That's not only a pretty substantial drop, but it also represents the lowest level of unemployment since the pandemic began wreaking havoc on the U.S. economy in early 2020.
Not only did the jobless rate fall a lot in July, but 943,000 new jobs were added last month. Not surprisingly, the leisure and hospitality industry did the most hiring.
Hiring was up across small businesses, too. In fact, the rate of small business hiring between June and July rose at its fastest single-month rate since 2010, according to Paychex.
All of this means that the economy on a whole is in better shape than it's been in for a long time. And a recovering economy also makes a follow-up stimulus check less likely.
The Delta variant remains a wild card
While things improved economically in July, we also have to remember that the Delta variant is still out there, causing a surge in COVID-19 cases and creating a lot of economic uncertainty. So far a number of cities have taken the step of implementing mask mandates in an effort to curb the spread of the outbreak. But the big question mark that remains is whether major restrictions will come back into place if the situation doesn't improve.
Early on in the pandemic, non-essential businesses were forced to shutter or limit capacity due to health concerns. That, in turn, left many businesses with no choice but to let staff go. If the outbreak reaches a point where similar mandates become necessary, we could see the jobless rate spike once again. And if that were to happen, it could make the case for another stimulus round.
That said, some lawmakers were very critical of the fact that the last stimulus round -- the one that began in March under the $1.9 trillion American Rescue Plan -- wasn't targeted enough. If another stimulus check is approved, it may be earmarked solely for people whose wages are cut or jobs are lost.
Many people used the last round of stimulus money they received to pad their savings rather than pay for essentials. And while that's hardly an irresponsible move, it also goes to show that another widespread stimulus round may not be necessary.
Ultimately, it's too soon to know whether Americans will be in line for a fourth windfall. At this point, the likelihood of there being another stimulus check this year is waning. Those looking to get their hands on extra money may have to look at other options, like getting themselves side hustles or lowering their living costs to carve out more savings.
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