FILE PHOTO: On June 18, 2020 in Frankfurt, Kentucky, US, people stand in line outside the Kentucky Career Center to find assistance with their unemployment claims. REUTERS / Brian Woolstone
(Reuters) – Americans who received increased unemployment benefits due to the coronavirus virus epidemic spent more than when they were working, a study released on Thursday said, spending on ending emergency benefits Adding to concerns about a steep decline in.
According to research by the JP Morgan Chase Institute, a weekly supplement of $ 600 in unemployed households as part of the CAR Act helped 10% more spending for unemployed families.
Researchers analyzed transactions for 61,000 families receiving unemployment benefits between March and May. The study found that all households dropped out due to virus outbreaks and business closures, but increased when families started receiving unemployed benefits, the study found.
Households who typically receive unemployment benefits typically have a deduction of up to 7%, as regular unemployment benefit amounts are only up to a fraction of a person’s prior earnings, the research found.
The analysis highlights how additional unemployment benefits following the epidemic are helping to boost the US economy and consumer spending, leading to increased unemployment across the country.
More than 30 million Americans are estimated to receive unemployment benefits – and supplemental benefits due to expire at the end of July, when they can be pushed off an income cliff, are withdrawn.
“Our estimates suggest that the termination will result in large spending cuts, with potentially negative effects on both households and macroeconomic activity,” the researchers wrote.
The data also reflected the financial distress of families who faced major delays in post-application benefits in states across the country.
The study found that families had to wait several weeks for their first unemployment check. Cost recovered after check.
Reporting by Johnnelle Marte; Editing by Richard Pullin