Americans shouldn’t start counting their stimulus money just yet.
Most important points
- In November, the US economy added 263,000 jobs.
- The national unemployment rate remained stable at 3.7% as of October.
- A strong labor market makes it difficult to justify a round of stimulus support.
At this point, it’s pretty fair to say that Americans won’t see a federal stimulus check appear in their bank accounts in 2022. But some people may be hoping for a boost in 2023 — maybe even early in the year.
Economists have been warning of a possible recession for months. And if economic conditions take an extreme turn for the worse, that could be enough to warrant another round of stimulus.
But recent job data points to a labor market that remains solid. And that means a federal stimulus check is highly unlikely anytime soon.
The unemployment numbers look good
In November, 263,000 new jobs were added, while experts had predicted that only 200,000 jobs would be added. The national unemployment rate also stood still at 3.7%, which is similar to the unemployment rate just before the pandemic.
Some of the biggest job-related gains came from the leisure and hospitality sector, which has been trying to rebuild since 2020. Healthcare has also added many jobs.
Interestingly, these new jobs were introduced at the same time that some big names in the tech industry decided to go ahead with layoffs. And that gives a somewhat confusing picture.
But let’s also not forget that the technology sector was battered this year, with stock prices falling there. And so it makes sense to see the tech industry in particular acting cautiously, especially ahead of recession warnings.
It is worth noting that monthly job growth in November represents the lowest number of new jobs created since April 2021. However, it is also a much higher number than what we saw before the pandemic started. And it is certainly an indication that the labor market and the economy are in good shape at the moment.
Should Americans write off the idea of a federal stimulus check?
Based on current labor market conditions, it’s pretty reasonable to say that a federal stimulus check won’t be coming any time soon. But if things take a turn for the worse in 2023, that could change.
That is of course also a scenario that no one should wish for. If a recession hits and it leads to a wave of layoffs, the financial pain it causes may well outweigh the benefit of a one-off stimulus check. And while some workers may think they’re immune to layoffs, the reality is we just don’t know how an economic downturn will play out.
In addition, an increase in unemployment does not guarantee that unemployment benefits will be increased as they were in 2020. Lawmakers were criticized for that, and they may not want a repeat.
Therefore, the public should not really hope for another stimulus check. Which people should hope instead is a cooling of inflation.
Fortunately, the rate of inflation is slowing, so much so that the Federal Reserve has said it will delay rate hikes in response. If that continues, consumers could end up with a world of financial relief by 2023, even if another round of stimulus never materializes.
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