In March 2020, in response to the Covid-19 pandemic, US Congress passed temporary enhanced unemployment insurance as part of the $2.2 trillion Cares Act stimulus package. These Federal benefit programmes ended on 4 September 2021.
As the US economy continues to recover from the COVID-19 pandemic fallout, Americans are finding it increasingly difficult to pay their bills.
According to the Census Bureau’s “household pulse” survey, last May, 46.7 percent of respondents said they had no difficulty paying usual household expenses, but by December 2021, it was 39.9 percent.
The number of those acknowledging it was “a little, somewhat or very difficult” to pay those bills rose from 45.9 percent to 49.9 percent during the same period.
According to analysts cited by US media, this is happening as the US economy has been steadily bouncing back, growing at a slightly faster pace in the three months ending September 2021 than originally predicted, according to Commerce Department figures released in late December. It was stated that GDP had increased at a 2.3 percent annualised rate in the third quarter of last year.
Gradually eroding buying power, claim analysts, is most probably explained by federal relief ending that was designed to support millions of people during the lockdowns and various measures set in place to curb the spread of the respiratory disease.
Approximately $6 trillion in relief programmes were passed by Congress to allow people to pay for rent, food, and other necessities during the pandemic.
This was done in the form of enhanced unemployment benefits, expanded Child Tax Credit, and the most far-reaching of these programmes – three rounds of stimulus checks. First introduced in the CARES Act of March 2020, Economic Impact Payments (stimulus checks) were direct cash injections directly into the bank accounts of individual people. However, the last stimulus payments went out in the first half of 2022.
In September 2021, emergency federal jobless benefits wrapped up. The expanded child tax credit expired last December, with no clarity regarding whether Congress will renew it.
Furthermore, the curtailment of aid is coming as US inflation surged to 6.8 percent in November – the highest level since 1982.
“There are people who are running out of money. It’s getting harder for them to pay their bills. The expiration of expanded unemployment insurance benefits and stimulus payments have taken a toll on household finances,” Philippa Dunne of TLR Analytics was cited by Yahoo Finance as saying.
Despite the strains that household finances are revealed to be under, unfilled jobs had reached unprecedented levels in 2021, with employers reporting 10.6 million openings.
With the Omicron variant of the coronavirus driving cases up, several million potential workers are believed to be still wary of catching COVID on the job. Some parents deplore a lack of job offerings with enough flexibility to allow them to manage their children’s unpredictable school schedules or care for sick family members.
Federal aid money had granted millions a financial cushion that has evaporated, with analysts predicting that tougher financial times for some Americans may impact political decisions in 2022 and the outcome of upcoming midterm elections.