Stimulus Update: Stimulus Checks Unlikely Despite Uptick in Jobless Claims
- Newly filed jobless claims reached 286,000 for the week ending Jan. 15.
- Despite that being a large jump from the previous week, it doesn't make the case for another stimulus check.
While newly filed unemployment claims rose, that doesn't automatically make the case for more widespread aid.
The U.S. economy had made great strides in recent months, to the point where December's national unemployment rate reached its lowest level since the start of the pandemic. But recently, things hit a snag.
For the week ending Jan. 15, newly filed unemployment claims rose to 286,000 from 231,000 the week prior. That was a huge disappointment given that economists were anticipating just 225,000 new claims.
But despite this temporary setback, Americans should not be anticipating another round of stimulus checks anytime soon. Here's why.
A temporary blip
While seeing a huge jump in unemployment claims may be unsettling, the reality is that a single week of higher numbers isn't going to sway lawmakers to start discussing stimulus checks again. In fact, even if jobless claims end up trending higher over the next few weeks, it's doubtful that it will result in another round of stimulus payments hitting Americans' bank accounts.
While it's true that many households have yet to recover financially from the blow of the pandemic, the reality is that the U.S. economy is in a much stronger place now than it was back when the last stimulus round was approved. Furthermore, while we could see a few weeks of higher jobless claims in the near term, largely due to the omicron surge, the hope is that that uptick will be temporary.
Right now, the omicron surge continues to rip through the country. But health experts are fairly optimistic that the current wave of infections will soon hit its peak in areas where that hasn't happened already. And they're also hoping the current wave will be relatively short-lived.
Therefore, we may see jobless claims rise temporarily as employees grapple with being out of work due to quarantine and isolation requirements. But that doesn't necessarily mean that employers are shedding jobs left and right like they were earlier on in the pandemic.
Quite the contrary -- many companies are still quite eager to hire, so much so that they're raising wages and throwing different incentives into the mix in an effort to incentivize workers to come on board. And so chances are, if unemployment claims rise, that increase will only last a few weeks before we see those numbers drop back down.
Is stimulus aid completely off the table?
It's pretty fair to say that Americans won't be getting a direct stimulus check anytime soon. But there's a chance lawmakers will find a way to get payments out to families with children under the expanded Child Tax Credit.
Last year, the value of that credit increased substantially, and payments were made available in monthly installments in an effort to provide households with a steady stream of backup income. President Biden had hoped to keep the expanded credit in place this year and wrote that into his Build Back Better plan. But that spending bill is currently stalled in the Senate.
At this point, lawmakers may have to break up that massive spending bill to move it forward. And while there's strong opposition to keeping the enhanced Child Tax Credit around specifically, the hope is that through negotiations, that boost will come through for the families who need it in 2022.
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