Stimulus Update: One Metric Shows Just How Much Parents Are Struggling Without Stimulus Aid

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  • There's been no stimulus aid or boosted Child Tax Credit on the table this year.
  • Between that and inflation, parents are being forced to reduce their spending not just on themselves, but also, their children.

When parents start cutting back on children's purchases, it generally means bad news.

It's fair to say that 2022 has been a tough year financially for a lot of parents. And the reason largely boils down to a combination of rampant inflation and absent stimulus aid.

Granted, a number of states have issued their own stimulus checks this year as a result of having excess money in their budgets. But on a national level, no stimulus aid has been made available to the general public. And that extends to the boosted Child Tax Credit.

Last year, the Child Tax Credit got a boost that raised its maximum value from $2,000 to $3,000 for children aged 6 to 17, and $3,600 for children under the age of 6. Not only that, but half of the credit was paid in the form of monthly installments that hit recipients' bank accounts from July through December.

Meanwhile, inflation has driven just about every living cost imaginable up. Americans are paying more these days for housing, transportation, utilities, food, and apparel, among other things. And many have already raided their savings or racked up credit card debt just to stay afloat.

Unfortunately, there are statistics out there showing that food insufficiency has picked up in households with children this year due to a combination of inflation and no boosted Child Tax Credit. But a more subtle data point indicates that even middle-class parents are struggling without stimulus aid.

Parents are cutting back on children's clothing

It's common for parents to limit the purchases they make for themselves to free up more money to buy the things their children need. But Gap and Old Navy -- two major retailers that are a popular source for kids' clothing among middle-income households -- say they've been seeing less spending on children's and baby items this year. Since that's generally one of the last areas for parents to cut back on, it's an indication that a lot of households -- even middle-income families -- are buckling under the weight of inflation.

When can parents expect more stimulus aid?

At this point, a fourth stimulus check most likely isn't happening in 2022, or within the next few months. Could that change in 2023? Possibly, but only if economic conditions truly deteriorate and unemployment levels begin to spike.

Meanwhile, lawmakers are still fighting to restore some version of the boosted Child Tax Credit. That doesn't necessarily mean parents can expect monthly installment payments in 2023, or that the value of the credit next year will be the same as it was in 2021. But struggling families can at least take comfort in the knowledge that an enhanced Child Tax Credit is still in play.

To be clear, though, the Child Tax Credit didn't disappear for 2022. Families that normally get to claim the credit can seek to snag that money when they file their 2022 tax returns in 2023. But since we're still several months away from the start of next year's tax season, that's a windfall parents won't be getting their hands on for quite some time.

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