It depends on one key factor.
Most important points
- The latest round of federal stimulus checks was approved in March 2021.
- There has been no stimulus support this year, but that could change in 2023 if something happens.
- A recession could lead to another round of stimulus checks.
For months, Americans have faced an above-average cost of living as inflation has driven up the price of just about everything. Many people have used up their savings in the past year. And some have accrued dozens of credit card debts while feeding their families and making sure they had a roof over their heads.
With inflation so out of control, many people are hoping for another round of stimulus from the federal government. In the last round of federal stimulus to be approved, checks for $1,400 were deposited into recipients’ bank accounts, but those funds were green-lit again in March 2021. Since then, there has been no significant federal stimulus support, although some states have lost interest in recent months and made their own stimulus payments.
At this point, it’s pretty clear that federal stimulus support for 2022 isn’t on the table. But will anything change in 2023?
A recession could spark another round of stimulus
There’s a reason lawmakers aren’t passing more stimulus at this point: economic conditions don’t warrant it. Sure, inflation is rising and many people are struggling. But the reality is that the US job market is still doing well. And with unemployment low, a round of stimulus is unlikely to get through.
In fact, it’s easy to argue that a round of stimulus could exacerbate inflation. A big reason we’re in this mess is that many Americans ran out of cash last year thanks to stimulus measures at a time when supply chains were starting to close. This resulted in a decoupling between supply and demand, which caused prices to rise.
Fortunately, supply chains are not as battered as they were last year. Still, if more money is pumped into the economy, it could create an even bigger gap between supply and demand, exacerbating the problem.
And then can solve the problem of inflation? A reduction in consumer spending. The Federal Reserve has raised interest rates in an effort to make that happen. But if consumers shy away from the higher cost of borrowing and sharply curtail their spending, this could fuel a recession, along with a huge rise in unemployment.
If a recession hits now and unemployment rises, it could prompt lawmakers to pass another federal stimulus package. After all, it’s been done before. But that’s probably not something we should hope for.
Don’t count on a stimulus check in 2023
The US economy has the potential to sour in 2023, and that could lead to a round of stimulus. But no one should count on that.
Those who are struggling to keep up with their bills can try to use today’s strong job market to address that problem, either by fighting for higher wages or by looking for better-paying jobs. The gig economy is also strong, so there are opportunities to pick up side work. It may not be the same as an incentive check, but it can serve as an income boost.
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