The saga continues about the potential second round of stimulus checks. Americans are eagerly waiting for another series of stimulus checks because the prospects of them getting another job anytime soon aren’t improving. I have said before that the chances of second-round stimulus checks are mostly dependent on the US job market, and how the US economy deals with the coronavirus pandemic. Today’s US weekly jobless claims show the US job market continuing to deteriorate.
Policymakers have started to see that the odds against an early recovery aren’t stacking up. So now the conversation addressing the second round of stimulus checks is “on the table.”
Here is more on this topic:
More Americans File For Jobless Claims
The US weekly jobless claims data released today show another increase. The data confirmed more than 1.4 million initial jobless claims, and this was much higher against the forecast of 1.32 million. The data is awful, and it continues to maintain a worrying trend. The rising number of jobless claims calls for firm policy support because nothing about this jobs data is normal. More than 40 million jobless claims have been filed in the last three months or so. Yes, we have seen some drop in the continuous jobless claims data that has fallen below 2 million, but we are still at 1.9 million. The persistence of these numbers disturbs many people. The lack of improvement could push policymakers towards a more favorable course of action like a stimulus package. If the US unemployment rate continues to stay above 10%, and currently it is at 13.3%, it only means that there are more hard jobs at hand for policymakers.
Second Coronavirus Wave And Stimulus Checks
The US labor market was merely catching its breath, and businesses returning to their economic activity can see that the second wave of coronavirus has created grave concerns. Companies like Apple
The overall impact of these regional lockdowns by companies isn’t going to help the US labor market, and the total unemployment rate is likely to remain elevated for a more extended period. US corporations will probably delay their reopening plans until lockdowns are no longer a threat.
Companies may continue to lay off more workers to reduce their corporate cash burn rate. These workers will push the US unemployment number higher and put more pressure on the policymakers to help Americans via stimulus packages.
Trump And Kudlow: What About them?
President Trump has talked about another stimulus package, but this doesn’t necessarily mean stimulus checks. Given the fact that the US elections are just around the corner, Trump is likely to push for another stimulus checks to secure more support, especially after underwhelming support in his recent campaign rallies.
Larry Kudlow, director of the White House National Economic Council, mentioned on Fox News Business that Congress is considering another round of stimulus checks as part of the stimulus package. Kudlow said things are in the “pre-decisional” phase. Next month more details will unfold on this when Congress is expected to vote on this matter.
What we need is a clean reopening so that the US economy can bounce back and bounce back quickly. In the absence of this, Americans need help from the US government. Hopefully, the temporary job losses do not become permanent job losses. From an economic perspective, that is why the pandemic and the fragile data like Texas are worrying. The concern is that it constrains the reopening process, and if it reverses the opening process, Americans are likely to face more pain. The public will hold legislators liable for this, especially if they do not respond appropriately through providing stimulus packages.