Chances of another round of coronavirus stimulus checks were already grim. Now, a recent development gives lawmakers one more reason to turn down requests for any fourth stimulus checks. The latest jobs data brings in good news for the economy, but bad news for millions waiting for another coronavirus stimulus check.
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The latest jobs data showed that the unemployment rate dropped to 5.4% in July, compared to 5.9% in June. A drop of just 0.5% may not mean much to many, but what makes the latest number encouraging (for the economy) is that it is the lowest since the start of the pandemic last year, according to the Bureau of Labor Statistics (BLS).
Even though the unemployment number has not yet returned to pre-pandemic levels, the numbers are surely encouraging for policymakers and the overall economy. The unemployment rate was 3.5% in February 2020.
Other employment related data going against the chances of another stimulus check is the participation rate. As per the BLS data, the labor force participation rate for July is similar to that of June at 61.7%, and has been hovering near the same mark since June of last year.
Moreover, the sectors that were affected the most by the pandemic also made a healthy contribution to the jobs data. For example, the leisure and hospitality sector added 380,000 new jobs. At the start of the pandemic, the unemployment rate in the sector was almost 40%, and now it is at 9%. The education sector also added a significant number of new jobs.
Even small businesses are now hiring at a higher pace. According to Paychex, the hiring rate of small businesses between June and July was the fastest single-month rate since 2010.
Are Stimulus Checks Still Possible?
Congress first approved the stimulus checks when the unemployment rate was over 10%, but now the number is half that. This could mean that a catastrophe similar to the magnitude of the coronavirus pandemic would be needed to send the unemployment numbers that high.
The pandemic, however, is still not over and the number of COVID-19 cases is the highest since February. Many states, including the ones with low vaccination rates, are witnessing a surge in cases.
Though such reasons favor another round of stimulus checks, President Biden doesn’t seem keen on sending out another stimulus check. Moreover, it’s been some time since Biden last spoke about stimulus checks publicly. Biden last tweeted about stimulus checks on March 15, and that was when Congress approved the third stimulus check.
Biden likely believes that his infrastructure bills along with the expanded child tax credit and extra unemployment benefits are enough to revive the economy. However, if the pandemic were to get worse, then giving a stimulus check could be the best option to help people.