Second stimulus check: could unemployment rate affect relief-bill plans?
On Friday, the US Department of Labor revealed an unexpected upturn in the country's employment rate, with 2.5 million jobs gained in May.
After losing 20.7 million jobs in April as a result of the coronavirus pandemic, the United States economy experienced a surprise upturn in May, it was announced this week. The Department of Labor revealed on Friday that, as businesses began to reopen in the country, 2.5 million jobs were added last month, with unemployment falling from 14.7% to 13.3%.
How does this news affect the next stimulus bill?
Nonetheless, the jobless rate remains 10% higher than it was in February, leaving many Americans still eagerly awaiting news on whether or not they'll be receiving a second stimulus check, or Economic Impact Payment (EIP). Could the DOL's encouraging report affect plans to push through another relief package, though?
Moore: "No reason to have a major spending bill"
“It takes a lot of the wind out of the sails of any new plan," the White House economic adviser Stephen Moore was quoted as saying by the Washington Post on Friday. “We don’t need it now […]. There’s no reason to have a major spending bill. The sense of urgent crisis is very greatly dissipated by the report.”
However, this statement has been contradicted by another White House adviser, Kevin Hassett, who told Fox News on Saturday that there will “definitely” still be another stimulus bill, despite Friday's unexpectedly positive news.
Next relief package capped at $1 trillion spend?
Passed by the House of Representatives in mid-May, the $3tn relief package known as the HEROES Act would include a second round of EIPs for eligible Americans, but, with Republicans balking at the bill’s overall spend, it faces an uphill battle to get through the GOP-controlled Senate in its current form.
On Thursday, Bloomberg reported that officials in Donald Trump’s administration "expect to spend up to $1 trillion in the next round of economic stimulus", in keeping with a limit proposed by the Senate majority leader, Mitch McConnell.
However, the report added that the US president may seek to "push spending beyond that amount".
Whether or not Economic Impact Payments would still be part of such stimulus plans remains unconfirmed, notes the media outlet CNET, although Trump has previously said he expects people in the US to get another check.
Kudlow: "Less rescue and more incentive"
Speaking in the wake of the release of Friday’s employment figures, though, US National Economic Council director Larry Kudlow appeared to offer little encouragement to those eager for a second stimulus check, telling Fox Business that there should be a focus on "less rescue and more incentive".
“Today’s [jobs] number was a very pleasant surprise, certainly to the private sector and even to us in office. So maybe there are more very pleasant surprises, so we have to evaluate,” Kudlow said.
“I think we need to move from rescue and assistance to more long-term economic growth incentives. For example, the president mentioned payroll tax holidays for the workforce, he talked about capital gains, he talked about tax breaks for restaurants, entertainment, sports contests, he’s talked about tax breaks for tourism.
Ohio senator proposes $450 return-to-work bonus
In line with Kudlow’s remarks, Rob Portman, a Republican senator from Ohio, has suggested introducing a $450 weekly extra payment for people returning to work. “The point is to have a bonus to go back to work, which helps everybody, helps the worker, helps the small business and helps the taxpayer,” Portman told CNBC.
Kudlow has said the idea is "something we’re looking at very carefully", adding: "Sen. Portman has a good idea. He understands incentives and disincentives."
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