The last couple of days have been good for those waiting for the next round of stimulus checks. We have already seen optimistic words on the next stimulus round from President Donald Trump and Senate Majority Leader Mitch McConnell. Now Treasury Secretary Steven Mnuchin has backed direct payments as well. More importantly, Mnuchin also hinted about who will get the next round of coronavirus stimulus checks.
Who will get coronavirus stimulus checks?
At a news conference Thursday morning, Mnuchin said the White House would “seriously consider” a second stimulus payment. The Treasury secretary said that the first stimulus payments worked very well.
Carlson Capital's Double Black Diamond fund added 3.09% net of fees in the second quarter of 2021. Following this performance, the fund delivered a profit of 5.3% net of fees for the first half. Q2 2021 hedge fund letters, conferences and more According to a copy of the fund's half-year update, which ValueWalk has been Read More
“We’re very focused on, as part of the next CARES Act, we’re going to seriously consider whether we need to put more payments and direct payments,” he said.
Mnuchin then also indicated who would get the next round of coronavirus stimulus checks. The Treasury secretary suggested their focus will be on “legal Americans.”
“Our position is… legal Americans… American citizens should get the payments. That’s our focus. If people are here illegally, they are not going to get economic payments,” he said about who may get the next coronavirus stimulus checks.
Several questions were raised about the distribution of the first round of checks. The benefits of the CARES Act did not reach a few sections of people. Those without a Social Security Number and non-resident aliens were not eligible for benefits under the CARES Act.
The $3 trillion HEROES Act, which passed the House in May, proposes to give money even to those with Individual Taxpayer Identification Numbers (ITINs) and their families. According to the Institute On Taxation and Economic Policy, such an arrangement would mean that over 4.3 million adults and 3.5 million children would be eligible for the payment.
The HEROES Act proposes $1,200 payments per individual with a maximum of up to $6,000 per household.
Is another stimulus check needed?
However Mnuchin also said yesterday that it is still too early to tell if there is a need for more stimulus checks and that he is in discussion with “certain members of Democrats and Republicans to get ideas” on future stimulus.
His remarks came after another encouraging jobs report. Last month’s jobs report showed the addition of 4.8 million jobs. The unemployment rate is now down to 11.1%.
There was talk that June’s unemployment report would play a crucial role in deciding whether or not there will be another round of stimulus checks. Now that the report has come and it is good for the economy, those against the stimulus checks will have one more reason to argue against them.
Trump did not address the likelihood of more stimulus checks after the release of the unemployment report. However, he did suggest that the latest employment numbers are a positive sign for the economy.
On Wednesday before the release of the report, Trump reiterated support for another round of stimulus checks, adding that it would be larger than what Democrats have proposed. Previously, he said that the next round of stimulus payments would be “very generous.”
A point to note is that the latest employment report is based on data collected before the spike in coronavirus cases in several states. Specifically, the report is based on data from the second week of June.
Several businesses have shut down operations again following the rise in the number of cases. For instance, McDonald's has put its re-opening efforts on hold. Apple, which has already re-closed 47 stores, plans to close 30 more of its U.S. stores.
Is the job market stalling?
Several pieces of evidence suggest that the recovery in the job market may be stalling. In the states that are seeing an increase in coronavirus cases again, some restaurants, bars and retailers that re-opened are now being forced to close again. Such a scenario could push the unemployment rate back up.
For instance, California has closed bars, theaters and indoor restaurant dining in most parts. Texas has also slowed its re-opening efforts, while New York is not allowing indoor dining, reports Fox59.
The Department of Labor reported that the number of Americans who filed for unemployment benefits last week barely dropped to 1.47 million. Although this number has been dropping since it peaked in late March, it is still more than double the peak seen in 1982. Moreover, the number of people receiving unemployment benefits is still sizable at 19 million.
Other economic data points also suggest a deteriorating economy. According to credit and debit card data from JPMorgan Chase, there was a drop in consumer spending in the last week. Consumer spending increased steadily in late April and May.
This drop has been reported by states that have seen in a rise in coronavirus cases and by less affected states. Across the U.S., card spending dropped by about 13% last week compared to the same period last year. In the previous week, card spending dropped to almost 10%.