Stimulus Update: Will an Uptick in Layoffs Lead to Stimulus Aid?
- More companies have been cutting headcount as recession fears mount.
- If unemployment really picks up, it could make the case for another stimulus check -- but only if that uptick is extreme.
It's a question on many people's minds as more big companies seek to downsize.
For much of 2022, the news regarding the labor market was positive. Jobs were being added, wages were growing (though not at a fast enough pace to keep up with inflation), and the national unemployment level was low.
The latter is still true. In October, 261,000 non-farm jobs were added to the U.S. job market, and the national unemployment rate sat at 3.7%. That's comparable to the jobless rate prior to the pandemic.
But in recent weeks, the word "layoffs" has been making the news more frequently. In fact, last week, Amazon announced plans to cut about 10,000 staff members in an effort to conserve funds. And it's not the only big-name company with reported downsizing plans.
Needless to say, hearing about layoffs is far from settling. As it is, a lot of people have depleted their savings this year and racked up lots of credit card debt due to higher living costs. The idea of losing a job might be unbearably stressful.
Of course, some people may be wondering if an uptick in unemployment will lead to another round of stimulus checks. And the answer? It depends on just how bad things get.
A stimulus round could be in the cards
Is it possible that lawmakers will approve another round of stimulus checks in 2023? Absolutely. But for that to happen, the unemployment situation needs to get really bad. And right now, we're definitely not there.
The last round of stimulus checks to hit Americans' bank accounts was approved in March of 2021. The February before, the national unemployment rate sat at 6.2%. That's a far cry from where the jobless rate is today.
Furthermore, in the spring of 2021, COVID-19 vaccines were still in short supply, and that was keeping a lot of people out of the workforce due to health concerns. Since vaccines are widely available today, it's made it easier for more people to pursue job openings as they become available.
Now this isn't to say that the unemployment rate won't jump substantially in 2023. If a recession strikes, that could happen. But that's also not something anyone should hope for. If economic conditions grow dire enough to warrant another stimulus check, we can bet that the financial strain that ensues won't be resolved by a one-time payday, even if it amounts to $1,400 like it did in March of 2021.
Don't bank on a stimulus check
While an uptick in unemployment could fuel another stimulus round, that's not guaranteed to happen. And a payday like that isn't something Americans should count on.
Instead, those needing a financial boost should do their best to take matters into their own hands. Right now, the gig economy is still in pretty good shape, and a second job could lead to more savings and fewer financial concerns for a lot of people.
Furthermore, the annual rate of inflation was lower in October than in September. If that trend continues, consumers might soon be in line for relief -- even in the absence of a stimulus check.
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