US citizens receiving unemployment benefit spent more compared to pre-pandemic days, reveals study
WASHINGTON (US) – A study released on Thursday has revealed that Americans who received greater unemployment benefits because of the coronavirus crisis spent more compared to pre-pandemic days. Once the benefit period comes to an end, there would be a steep drop in expenditure, said the study.
The weekly supplement of $600 plus unemployment benefits as part of the CARES Act spurred families to spend 10% more, according to research by the JPMorgan Chase Institute.
Transactions of as many as 61,000 households were analysed between March and May. Initially, spending plunged during the lockdown when people lost jobs. Then it witnessed a rise once the benefits started coming in.
The study highlights how the additional jobless perks are boosting the economy and consumer spending.
As many as 30 million Americans are receiving the benefits. The supplemental benefits will expire at the end of July.
“Our estimates suggest that expiration will result in large spending cuts, with potentially negative effects on both households and macroeconomic activity,” the researchers said.
The study also unearthed the travails of families to getting the benefits as they were huge delays as several states were overwhelmed by applications.
Families had to wait several weeks for the first cheque to arrive and during that time, they slashed spending by 20%.
(Photos syndicated via Reuters)
This story has been edited by BH staff and is published from a syndicated field