Stimulus Update: 3 Frightening Stats That Show Why a Fourth Stimulus Check Is Needed
by Christy Bieber | Published on Sept. 2, 2021
Not everyone has benefited from the economic recovery.
One big reason why there is so much support for additional government aid is that many people have continued to struggle financially even as businesses have opened and begun hiring.
Stimulus checks have been proven to help reduce those struggles. But with no payments authorized since March of 2021, the economic benefits the checks provided are wearing off. In fact, some frightening new statistics from the Financial Health Pulse Points for the Second Quarter of 2021 show just how much the absence of another check has affected Americans who need help the most.
These three scary numbers from the Financial Health Network's examination of consumer transactions provide solid evidence that at least some Americans desperately need a fourth direct payment to be delivered to their bank accounts.
Here's why a fourth stimulus check is so important
Here are the three troubling numbers from the Pulse Points survey that show why the government should consider providing more help even as economic conditions appear to be improving:
- 17%: This is the decline in income experienced during the second quarter of 2021 by households who are experiencing food insecurity or housing insecurity. Households who don't have enough money for housing or food are the least able to absorb a huge decline in income. Unfortunately, that's exactly what they experienced as the influx of cash from stimulus payments earlier in the year ended. An income cut of 17% will leave these Americans even more at risk.
- 9%: This is the decline in consumer spending in the second quarter, compared to the first quarter. People were spending a lot more money when they received stimulus checks, and they've cut their expenditures because payments have stopped. Unfortunately, that decline in consumer spending can result in a slower economic recovery, which hurts everyone.
- 9.4%: This is what the personal savings rate dropped to in the second quarter of 2021. It's down from a high of 26.9% in the first quarter. During the first part of the year, Americans were able to put aside more money to protect against future financial hardship and build a more secure future. This was largely due to stimulus payments. Now that those payments have ended, the personal savings rate has fallen dramatically, suggesting people have to spend much more of their cash to stay afloat.
Clearly, these numbers are not good news. And, as the press release accompanying the survey stated, "Despite the economy reopening post lockdowns, most household incomes remain flat, savings are stagnant, and spending declined slightly for most categories. Overall, this reinforced financial health inequities for low-income households and those experiencing hardships, and could forecast further divergence in the latter half of the year."
If lawmakers want economic conditions to improve and don't want to leave the hardest-hit Americans to fall further behind, these numbers should be a wake-up call that a fourth stimulus check really may be desperately needed for those still struggling.
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