Photographer: Graeme Sloan / Bloomberg
Photographer: Graeme Sloan / Bloomberg
President Donald Trump’s decision to lift the pandemic exemption just before Christmas threatens to make it difficult for millions to wait for unemployment benefits and stimulus checks, further removing an already dire situation economy.
Trump’s The reluctance to sign a $ 900 billion bipartisan stimulus package that Congress approved Monday, along with its pressure for a new one, comes just as pandemic special unemployment benefits are about to expire for up to 14 million people . The funds were incorporated into an spending bill that would also risk a government close if not signed into law, with millions of entrepreneurial positions at stake.
It could take up to a month for people to receive their funds and even later for the effects to seep into the economy, according to Michael Englund, chief economist at Action Economics LLC.
Beyond the short-term impact, the lack of immediate direct payments and the gap in special unemployment benefits threaten to deepen the economic scars marked in particular by a jump in long-term unemployment.
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“It will be kind of pinched in December,” Englund said by telephone. “Many people are probably relying on checks made in the last week of December.”
In the meantime, “people are reducing their savings,” and additional blockages and closures will weigh heavily on the services sector, Englund said.
Even though House Speaker Nancy Pelosi plans to vote on Dec. 28 to increase the size of the $ 2,000 stimulus controls she has asked Trump to do, she has asked the president to sign the bill already passed by Trump. Congress, which has additional financial aid, including forgivable loans for small businesses, additional unemployment benefits, support for tenants facing eviction and funds for the distribution of vaccines.
The delay – even if it only lasts a few days – could hardly come at a worse time. Consumer spending and revenue fell more than analysts expected in November, while other data show that Americans are unloading their savings accounts, including cash from previous benefits.
Trump has a few more days to sign or veto the bill, which has gone wide enough that Congress could veto it, unless dozens of Republicans change their vote to avoid passing the president. .
Meanwhile, 803,000 Americans applied for state unemployment benefits last week, still nearly quadrupling the pre-pandemic level. Even activity in the hot real estate market is cooling as home sales fell last month, despite mortgage rates on minimum record.
Nearly 4 million Americans have been unemployed for more than six months, and research has shown that it is becoming more difficult to get a job, and these people are more likely to accept less paid work, reducing their future expenses and opportunities.
The spread “adds insult to injury at a time when people are losing checks and are already living off the smoke,” according to Diane Swonk, chief economist at Grant Thornton LLP. “It’s huge. There are 14 million people leaving a rock. “
– With the assistance of Anna Edgerton