Consumer Spending Among Unemployed Americans Higher Than Pre-Pandemic Due to Additional Jobless Benefits

With the Federal Reserve pumping trillions of dollars into the US economy with hopes of saving it from complete collapse, it appears that the money did produce a noteworthy effect amid the soaring unemployment rates.

The additional $600 in weekly unemployment benefits has not only helped those who suddenly found themselves jobless remain afloat, but also has caused them to increase their spending in the meantime. In fact, according to analysts at JPMorgan Chase Institute, households ended up spending on average 10% more than before the pandemic. The researchers found the consumer behaviour to be rather puzzling, given that in a typical recession, households that receive jobless payments tend to reduce their spending by approximately 7%.

However, with the $600 unemployment top-up slated for phase-out by the end of July, the increased spending that has upheld the fragile economy may soon come to an end. As much of the country continues to battle soaring coronavirus infection rates and no decrease in jobless claims, the 30 million Americans and counting that no longer have a steady source of income may significantly impede consumer activity – and ultimately, the US economy.

Information for this briefing was found via Reuters, CNBC, RT News, and JPMorgan Chase. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply

Video Articles

Endeavour Mining Q1 Earnings: Cash Flow Is King

G Mining Oko West Feasibility: Move Fast, Break.. Nothing?

New Gold Q1 Earnings: What’s Behind The Market’s Surprising Reaction?

Recommended

First Majestic Posts Record Cash Flows In Q1 As Production Costs Fall

Brazil Potash Secures Funding In Support Of US$2.5 Billion Autozales Project

Related News

Trudeau Government Mulls Including New Social Programs In Upcoming Fiscal Plan

It appears that the Liberal government’s fiscal plan will soon be expanded to include permanent...

Friday, October 30, 2020, 12:31:00 PM

US Mortgage Rates on the Rise Following Fed’s Comments

US mortgage rates inched higher on Thursday to around 3.25%— the highest since mid April,...

Friday, June 18, 2021, 10:38:00 AM

QE Is Here: Major Central Banks Make Collective Effort to Boost US Dollar Liquidity

Brace yourselves: Quantitative easing is officially here. On Sunday night, the Federal Reserve— along with...

Tuesday, March 21, 2023, 06:23:00 AM

Federal Reserve Doubles Taper, Now Forecasts 3 Rate Hikes in 2022

With persistent inflation running hotter than ever, the Federal Reserve has decided to take an...

Thursday, December 16, 2021, 02:56:00 PM

US Oil Jobs in Peril: Many Will Never be Recouped Even in the Post-Pandemic World

As the demand for crude oil is slated to remain subdued for the foreseeable future...

Sunday, October 18, 2020, 03:44:00 PM