While recent unemployment claims have risen, it does not automatically give rise to more widespread assistance.
- Recent unemployment applications reached 286,000 for the week ending January 15th.
- Despite being a big leap from the previous week, it does not give rise to another stimulus check.
The US economy had made great strides in recent months, to the point where December’s national unemployment reached its lowest level since the start of the pandemic. But recently, things have hit a chord.
For the week ending January 15, newly filed unemployment applications rose to 286,000 from 231,000 the week before. It was a big disappointment as economists only expected 225,000 new claims.
But despite this temporary setback, Americans should not expect another round stimulus check in a minute. Here’s why.
A temporary blip
While it may be disturbing to see a big jump in unemployment claims, the reality is that a single week with higher numbers will not get lawmakers to start discussing stimulus checks again. In fact, even if unemployment applications end up trending higher over the next few weeks, it’s doubtful whether it will result in another round of stimulus payments hitting Americans’ bank accounts.
While it is true that many households have not yet recovered financially after the onset of the pandemic, the reality is that the US economy is much stronger now than it was then when the last round of stimulus was approved. Although we could see a few weeks of higher unemployment applications in the short term, mainly due to the omicron increase, the hope is that the increase will be temporary.
Right now, the omicron rise continues to tear through the country. But health experts are quite optimistic that the current wave of infections will soon reach its peak in areas where it has not already happened. And they also hope that the current wave will be relatively short-lived.
Therefore, we can see the number of unemployment requirements increase temporarily as employees struggle to be out of work due to quarantine and isolation requirements. But that does not necessarily mean that employers are throwing jobs left and right as they were earlier in the pandemic.
On the contrary – many companies are still quite eager to hire, so much so that they are raising wages and throwing various incentives into the mix in an attempt to encourage workers to get on board. And then the chances are, if unemployment applications rise, that the rise will only last a few weeks before we see those numbers fall back.
Is stimulus help completely off the table?
It is quite fair to say that Americans will not get a direct stimulus check right now. But there is a chance that lawmakers will find a way to get payments out to families with children below extended child tax deduction.
Last year, the value of this credit increased significantly and payments were made available in monthly installments in an attempt to provide households with a constant flow of reserve income. President Biden had hoped to keep the extended credit in place this year and wrote it into his Build Back Better plan. But that expense bill has currently stalled in the Senate.
At this point, lawmakers may have to break up the massive expense bill to move forward. And while there is strong opposition to preserving the improved child tax deduction specifically, it is hoped that through negotiations, that boost will come through for the families who need it in 2022.
Top credit cards erase interest rates into 2023
If you have credit card debt, transfer it to this top balance transfer card ensures you an intro APR of 0% in 2023! In addition, you do not pay any annual fee. These are just a few reasons why our experts rate this card as a top choice to help you take control of your debt. Read the full The Ascents review free and apply in just 2 minutes.