As the conclusion of this additional $600 per week at pandemic unemployment insurance looms large, some economists fear that the uncertainty within its expansion may dampen consumer spending and extend the downturn.
The extra $600 per week in unemployment insurance has been part of the national CARES Act but is set to expire at the end of July. Even though lawmakers are debating the best way to maintain additional financial aid flowing for the millions who stay from work because of this pandemic, now it does not look to be an expansion is going to be passed before the expiration date.
If Congress does neglect to act before July 31, some 25 million Americans will receive their past enlarged unemployment checks that this weekend.
Though people who lost their jobs might eventually wind up getting more cash if Congress acts, the remarkable doubt concerning the future might nevertheless cause customers to save instead of spending.
The loss of customer spending and confidence can finally make the downturn to be more and the recovery diminished, the economists assert.
“Significantly, how families feel about their future financing tends to dictate how customers spend now.
“Uncertainty on the abrupt reduction of supplemental benefits might have a lingering effect on the savings/spending trade-off,” they added.
The group called for urgent action from Congress, stating,” another aggressive financial response is desperately needed that focuses on monetary relief for families.”