Lack of Jobs
The pandemic has brought a multitude of problems with it but one large issue is unemployment. As of this past Thursday, the Labor Department made a report that underscored the fact that “current President Joe Biden has inherited an economy that faltered this winter as virus cases spiked, cold weather restricted dining and federal rescue aid expired.” Despite the unemployment boom being months ago the Government reported that 5.1 million Americans are still receiving unemployment benefits.
There is a multitude of state and federal aid available to the unemployed, which could be prompting some people to not seek out a job to replace the one they lost. A $900 billion federal aid package was enacted last month that was set to provide $300 a week to the unemployed. On top of which most adults will also be receiving $600 stimulus checks. And finally, while Biden has been in office, he made a $1.9 trillion coronavirus plan that would provide $1,400 checks for most Americans. This new plan would also make a $400 check a week in federal benefits available and an extension on moratorium on evictions and foreclosures through September. Bringing total aid available to at least $2,000 per person.
According to the Bank Of America, federal aid and payments have helped drive an increase in spending using debit and credit cards issued by them. Total card spending has jumped by 9.7% which is a 2% year-over-year increase before the stimulus payments began. So, what are people spending all of this new found money on? Well, electronics and apparel purchases were up 11% and 12% while online spending in May hit $82.5 billion, up 77% from last year.
Last year's holiday season shopping was a total of $142.5 billion dollars spent from November 1st to December 31st, a 13% year-over-year increase. “According to our data, it would’ve taken between 4 and 6 years to get to the levels that we saw in May if the growth continued at the same levels it was at for the past few years,” Vivek Pandya, Adobe’s Digital Insights Manager. Many people when asked have reported spending their federal aid on miscellaneous items because they “had nothing better to do at home” and, as previously stated, economists have reported more people applying for federal aid benefits more than ever.
Over 900,000 Americans have applied for unemployment benefits which is one of the highest numbers of claims in our history. Unemployment rates still stand at a high 6.7% and with the amount of jobs lost increasing steadily next to the rising COVID-19 cases and forced business closures, we could expect to see even more job losses in the future.