Unemployment claims are the lowest since the pandemic began

The Fed changed its policy framework last year to focus on full employment “deficits” rather than “deviations.” In practice, that means you don’t plan to raise interest rates just because the job market heats up – for example, if unemployment falls below historically normal levels, as long as inflation is under control.

“The more vibrant the job market, the more likely it is to be an inclusive and vibrant job market,” Charles Evans, president of the Federal Reserve Bank of Chicago, said in a call with reporters Thursday. “We are not going to cut short a vibrant job market prematurely.”

Frequently asked questions about the new stimulus package

Stimulus payments would be $ 1,400 for most recipients. Those who are eligible would also receive an identical payment for each of their children. To qualify for the $ 1,400 total, a single person would need an adjusted gross income of $ 75,000 or less. For heads of household, adjusted gross income must be $ 112,500 or less, and for married couples filing jointly, that number must be $ 150,000 or less. To be eligible for a payment, a person must have a Social Security number. Read more.

Buying insurance through the government program known as COBRA would temporarily become much cheaper. COBRA, per the Consolidated Omnibus Budget Reconciliation Act, generally allows someone who loses a job to purchase coverage through the previous employer. But it is expensive: under normal circumstances, a person may have to pay at least 102 percent of the cost of the premium. Under the aid bill, the government would pay the entire COBRA premium from April 1 to September 30. A person who qualified for new employer-based health insurance elsewhere before September 30 would lose eligibility for no-cost coverage. And someone who voluntarily quit a job would also not be eligible. Read more

This credit, which helps working families offset the cost of caring for children under 13 and other dependents, would be significantly expanded for a single year. More people would be eligible and many beneficiaries would get more rest. The invoice would also make the credit fully refundable, which means you could collect the money as a refund even if your tax bill was zero. “That will be helpful for people at the lower end” of the income scale, said Mark Luscombe, senior federal tax analyst at Wolters Kluwer Tax & Accounting. Read more.

There would be a big one for people who already have debts. You would not have to pay income tax on the forgiven debt if you qualify for a loan forgiveness or cancellation, for example, if you have been on an income-based repayment plan for the required number of years, if your school let you down or if Congress or the president clears $ 10,000 of debt for a large number of people. This would be the case of debt forgiveness between January 1, 2021 and the end of 2025. Read more.

The bill would provide billions of dollars in rental assistance and utilities to people who are struggling and in danger of being evicted from their homes. About $ 27 billion would go to emergency rental assistance. The vast majority would replenish the so-called Coronavirus Relief Fund, created by the CARES Act and distributed through state, local and tribal governments, according to the National Low Income Housing Coalition. That is in addition to the $ 25 billion in assistance provided by the aid package approved in December. To receive financial assistance, which could be used for rent, utilities, and other housing expenses, households would have to meet several conditions. Household income cannot exceed 80 percent of area median income, at least one household member must be at risk of homelessness or housing instability, and individuals would have to qualify for unemployment benefits or have experienced financial difficulties (directly or indirectly) due to the pandemic. Assistance could be provided for up to 18 months, according to the National Low Income Housing Coalition. Low-income families who have been unemployed for three months or more would have priority for assistance. Read more.

There have been false starts before – that is, an explosion of growth that faded as the virus worsened in the fall – but last week’s claims drop was still notable for its size. In February, the economy remained more than nine million jobs below where it was before the pandemic.

Unemployment claims have been at historically high levels over the past year, in part because some workers have been laid off more than once. Still, the bottom line is that the data has been favorable recently, said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

“The weekly numbers have been choppy, but we have had a downward trend since mid-January,” he said. “As more business owners see a reopening happening, they will be more willing to hang on to staff.”

Between state and federal programs, the number of new jobless claims last week was just under 900,000 after having been stuck for months above a million a week.

There were 242,000 new claims for Pandemic Unemployment Assistance, a federal program that covers the self-employed, part-time workers and others who do not routinely qualify for state benefits, a decrease of 43,000.

Source link