Unemployment Benefits See Americans Spending Double Than They Usually Would

Have the enhanced unemployment benefits upped the standard of living among Americans? Well, research by the JPMorgan Chase Institute suggests so. A study released on Thursday pointed to how it is likely to witness a steep drop in spending when the emergency benefits -- $ 600 weekly supplement as part of the CARES Act -- wind up towards the end of July.

An analysis that studied the spending habits of 61,000 households between the months of March and May, concluded that over 30 million Americans were spending twice as much than they would after they saw the unemployment benefits coming.

On the onset of the pandemic, when businesses shut, the spending capacity had fallen approximately by 20 percent. The sudden surge in consumer spending and its effects on the U.S. economy will have its repercussions, the researchers inferred.

What needs to be noted is that the statistics are a stark contrast to what’s usually observed amid a typical recession, when households receiving unemployment benefits continue to save up and chunk the spending by 7% solely because the jobless benefits amount to only a fraction of a person’s prior earnings.

“Our estimates suggest that expiration will result in large spending cuts, with potentially negative effects on both households and macroeconomic activity,” added the researchers.

The United States of America continues to be on the top spot among countries to be worst affected by the pandemic. Having crossed over three million cases, the U.S. continues to grapple under the global health crisis -- with its president, Donald Trump, amassing severe flak over a period of time.

On the other hand, Trump who is seeking re-election in the forthcoming presidential 2020 elections in November, recently announced his plans to sign a merit-based immigration law at the earliest, during a recent press conference at the White House Rose Garden.

“We are going to be signing an immigration act very soon. It is going to be based on merit, it is going to be very strong,” Trump told on Tuesday. “We are going to work on DACA (Deferred Action for Childhood Arrivals) because we want to make people happy and I will tell you even conservative Republicans want to see something happen with DACA,” he added.