Stimulus Update: Inflation Alone Won't Drive a Fourth Check

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Though inflation may be rampant, economic conditions aren't ripe for another stimulus round.


Key points

  • Many Americans are holding out hope for a fourth stimulus check.
  • While living costs may have risen, the economy is in a healthy enough place to make that aid less likely.

Is there any hope for a fourth stimulus check? That's the question on many people's minds as they grapple with rising living costs.

The last round of stimulus checks to hit Americans' bank accounts went out in March, and since then, many have wondered whether another round would follow. But based on recent economic conditions, that additional check is becoming less and less likely.

The economy's in better shape

These days, many people are struggling to keep up with the ever-rising cost of living. But rampant inflation alone likely won't make the case for another stimulus check.

In fact, inflation is actually a sign that the economy is doing well. That may seem counterintuitive, but a big reason the cost of goods is so high right now is that consumer demand is exceeding the available supply. And for demand to be so high, it means consumers need to have the financial means to buy things.

That wasn't so much the case earlier this year, when unemployment numbers were still higher. But now, consumers seem to have the flexibility to spend more, which is driving prices upward.

Speaking of unemployment, last week, new jobless claims fell once again. And the number of people collecting unemployment benefits has reached a 20-month low.

While some jobless workers may be facing personal challenges getting back into the workforce, the reality is that there are plenty of jobs to go around. In fact, many industries are still experiencing labor shortages, which may be a frustrating thing, but it's also a sign that there are jobs out there. And in light of all of this, it's hard to make the case that economic conditions warrant a follow-up stimulus round.

Americans could get help with heating costs

Though there won't be a fourth stimulus check coming in anytime soon, those who are struggling with rising living costs may be in line for a bit of a reprieve. With the cost of natural gas climbing, lawmakers fear that many Americans won't manage to keep up with the cost of heating their homes this winter. And so the Biden administration had announced plans to dip into leftover COVID-19 relief funds and make some of that aid available in the form of heating bill assistance.

In fact, there's actually an estimated $376 billion left over that lawmakers can access for this purpose. And while that's not the same thing as a direct stimulus check that can be spent on just anything, it could still end up being a very essential round of aid.

Furthermore, families that are eligible for the boosted Child Tax Credit still have one more monthly installment payment heading their way in December before those come to an end. But then, the remainder of the Child Tax Credit will be available to recipients in 2022 in the form of tax refunds. Lawmakers also intend to keep the enhanced version of the credit in place for the upcoming year, so a large number of Americans will have access to that extra aid, too.

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