January 18, 2022

Weekly unemployment claims fall, reducing the chance of the fourth round

A line of people dressed in business attire engaging while waiting.

Image Source: Getty Images

An improvement in unemployment benefit claims could make a fourth stimulus check this year even less likely.

Earlier this year, when the US bailout plan was signed, it was clear that the US economy was still not in good shape. At the time, not only was the unemployment rate higher than it is today, but because COVID-19 vaccines were not widely available, it was more difficult for those who unemployment to go out and look for work. As such, it was easy to argue for the sending of stimulus checks to the U.S. bank accounts.

However, things have improved since then. During the summer, new jobless claims fell and national unemployment also fell. In fact, the number of new unemployment claims last week was just 326,000. That is a decrease of 38,000 compared to the previous week. And it also makes a fourth stimulus check this year a lot less likely.

It’s not bad enough for a fourth check

Last week’s 326,000 new jobless claims are not exactly a pandemic-era low. That milestone was reached in the summer. Still, it’s a positive development, especially since new claims had gone up in the weeks prior.

Not only were there fewer new jobless claims filed last week, but persistent claims, which are a week behind schedule, fell by 97,000. They are now at 2.71 million, which, to be clear, is still a large number, but lower than where the sustained claims were earlier in the year.

One thing worth noting is that many unemployed workers were effectively kicked out of unemployment in early September when a few key federal programs ran out. Self-employed workers, for example, who would not normally qualify for unemployment, but were able to obtain it because of temporary provisions put in place during the pandemic, lost their benefits at the time.

Still, the bottom line here is that the economy is in better shape than when the last stimulus was approved. And unless things take a remarkable turn, something we shouldn’t hope for, we can assume Americans won’t be lining up for a fourth stimulus check this year.

That said, parents are still eligible for extra cash thanks to the extended Child Tax Credit. This year, half of the credit will be paid in monthly installments, the next one is in mid-October. Those payments have already helped families tremendously to get their finances in order, and they have also lifted many children out of poverty.

An alternative to a fourth check

It’s too early to say if there will be a fourth stimulus check in the future. But it’s unlikely to happen in the coming months.

Those in need of extra cash, therefore, may want to try to do their own stimulus check, so to speak, by taking on extra work in addition to their main job. Right now, many industries are struggling to hire people, and we can expect retailers in particular to need more hands on deck as the holiday season approaches. And so those hoping for a fourth stimulus check have ample opportunity to increase their cash reserves in the absence of a government payday.

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