For the majority of 2022, the labour market news was optimistic. Jobs were being created, incomes were rising (albeit not quickly enough to keep pace with inflation), and the national unemployment rate was low.
The latter remains true. In October, 261,000 nonfarm jobs were added to the US labour market, with the national unemployment rate remaining at 3.7%. This is comparable to the unemployment rate before the epidemic.
However, the term “layoffs” has become more common in recent weeks. Indeed, Amazon said this week that it intends to lay off approximately 10,000 employees in order to save money. And it’s hardly the only major corporation with rumoured downsizing plans.
Needless to say, learning about layoffs is distressing. As it is, many people have drained their savings and accumulated significant credit card debt as a result of higher living expenditures this year. The prospect of losing a job can be quite distressing.
Of course, some may be asking if an increase in unemployment will result in another round of stimulus payments. And what is the answer? It all depends on how terrible things get.
A Stimulus Round May Be in the Works
Is it possible that Congress will authorise another round of stimulus payments in 2023? Absolutely. However, for that to occur, the unemployment rate must become extremely high. And we’re certainly not there yet.
The final tranche of stimulus payments to American bank accounts was approved in March 2021. The national unemployment rate was 6.2% in February. That is a vast cry from the current unemployment rate.
Furthermore, COVID-19 vaccines were still in low supply in the spring of 2021, keeping many people out of employment due to health concerns. Because vaccines are now readily available, it is easier for more people to apply for job openings when they become available.
This is not to suggest that the jobless rate will not rise significantly in 2023. That might happen if a recession hits. However, that is not something anyone should want for.
If economic conditions deteriorate to the point that another stimulus package is required, we can assume that the financial hardship that results will not be alleviated by a one-time payment of $1,400, as it was in March of 2021.
Don’t Expect a Stimulus Check
While an increase in unemployment could fuel another wave of stimulus, it is not inevitable. And such a payoff is not something Americans should count on.
Those in need of financial assistance should instead try to take issues into their own hands. Right now, the gig economy is still doing well, and a second job could lead to more savings and fewer financial worries for many people.
In addition, the annual rate of inflation was lower in October than it was in September. If this pattern continues, consumers may soon find themselves in line for relief, even in the absence of a stimulus package.