Fourth stimulus check news summary: Saturday 8 May
US stimulus checks: live updates
- Labour Department tells states to waive unemployment overpayments (full story)
- US job growth far below expectations in April amid labour shortages. How does this change prospects for another found of stimulus payments?
- Stocks rally, commodities jump on US jobs report
- White House reportedly considers introducing automatic stimulus checks
- California officials give an update on Golden State Stimulus check distribution process (read more)
- IRS tax return deadline of 17 May looms
- Biden set to meet Republican & Democrat lawmakers on 12 May to discuss American Families Plan
- New batch of stimulus checks provides 570,000 additional plus-up payments, worth an estimated $1 billion
- You can track your third stimulus check by using the IRS' Get My Payment tool
- US covid-19: 32.68 million cases / 581,516 deaths (live updates from JHU)
Check out some of our related articles:
Havard alumn and epidemiologist Eric Feigl-Ding outlines just how the American Rescue Plan helped to slow hunger in the US.
Advice for Californians looking to get the most out of their federal and state benefits this tax filing season.
How effective are stimulus checks according to Biden? Are they really necessary?
“We’ve already sent more than 160 million checks out the door. It’s making a difference," Biden said, in the first address to a joint session of Congress of his presidency. "For many people, it’s making all the difference in the world."
Although a fourth payment is popular with the public, the Biden administration appears less convinced about the prospect of another round of direct payments.
Read our full coverage here.
Public pressure for another round of stimulus payments is growing. A change.org petition has now reached almost 2.4 million signatures. This increase comes as the US economic recovery shows signs of slowing.
Fourth stimulus check: What are Biden's economic proposals according to the unemployment report?
The Bureau of Labor Statistics released the April jobs report and it sounded alarms of a slowing economic recovery. With the country eager to return to normalcy, the Dow Jones had expected that over more than one million jobs would be added. In the end, that number was only 266,000.
The April jobs numbers leave the national unemployment rate of 6.1% unchanged and have many policymakers and economists concerned that the economic recovery could last much longer than expected. The report highlights that increases in hiring in the hospitality sector offset losses “employment declines in temporary help services and in couriers and messengers.” Across age, racial, and gender demographics, no groups saw significant decreases in unemployment.
Additionally, the number of people who have lost their jobs permanently increased, showing that the need for unemployment benefit extensions may need to be taken up again by Congress if the numbers do not improve in the Spring and early Summer.
For more on how Biden responded to the April jobs numbers and the prospect of a fourth stimulus payment, read our full coverage by Maite Knorr-Evans.
In February Governor Gavin Newsom signed into law California’s own stimulus program, the Golden State Stimulus, which included $600 to $1,200 in payments to eligible taxpayers in the state. Thursday was the first announcement of just how many payments have gone out so far.
The IRS has now sent out eight batches of third stimulus checks as part of the economic-aid scheme, which was included in President Biden's $1.9tn covid-19 relief package.
California's Franchise Tax Board is distributing stimulus checks of $600 or $1,200 to eligible residents of the state.
Eligible Californians are receiving a one-time stimulus check of $600 or $1,200 as part of a statewide relief package passed in February.
Stimulus checks: every AS English article
In our dedicated stimulus-checks section, you’ll find updates on a possible fourth federal direct payment, as well as information on the third round of checks.
There’ll also be news on related topics such as the Golden State Stimulus payments in California, and a $1,000 ‘pandemic bonus’ for first responders in Florida.
First responders in Florida are to receive a one-time bonus as a "small token of appreciation" for their efforts during the coronavirus pandemic, Governor Ron DeSantis announced on Wednesday.
Families are set to begin seeing up to $300 per child in monthly payments from the enhanced Child Tax Credit this summer, after the IRS doubled down on its commitment to start sending payments this July.
Jobs report alleviates concerns about rising inflation
Friday's labour market figures calm nerves about potential rising inflation and and potentially higher U.S. interest rates which would weigh on the valuations of growth companies.
Ten of the 11 major S&P 500 sectors were higher in early afternoon trading, with a 1.3% rise in technology stocks leading the advance. Financials dropped 0.1%, with interest rate-sensitive shares of lenders Bank of America, JPMorgan Chase & Co and Citigroup Inc trading lower. The S&P 500 banks sector fell 0.4%.
"If this is a one-off jobs report, if the economy is recovering as strongly as we anticipate, that is something that could drive yields higher and favor other value names and reopening plays at the expense of tech stocks," said Matt Weller, global head of market research at Forex.com.
Who could see their taxes going up under the Biden tax plan?
Currently Biden has laid out how he wants to tax wealth the same as income reversing decades of earned income being taxed more than capital gains on investments. However, the legislation still needs to get through Congress where some of the increases have even met resistance from Democratic senators, most Republican lawmakers don’t want to see any increases.
For individual taxpayers, the proposal as it is now would see the highest tax bracket rate, for those making over $400,000, increase from 37 percent to 39.6 percent. It would also raise the capital gains tax rate for those earning at least $1 million annually from 20 percent to 39.6 percent.
Canada posts hefty job losses in April as third wave bites
Canada lost more jobs than expected in April as fresh restrictions to contain a variant-driven third wave of covid-19 weighed on employers, Statistics Canada data showed on Friday.
Some 207,100 jobs were lost in April, more than the average analyst prediction for a loss of 175,000. The unemployment rate climbed to 8.1%, missing analyst expectations of 7.8%. Employment is now 2.6% below pre-pandemic levels.
"This episode seemed to be a little more impactful in that it led to a big decline in full-time jobs and specifically in private-sector employment," said Doug Porter, chief economist at BMO Capital Markets.
"There were some heavy hits in education and culture and recreation. So it seems like the third wave bit into other sectors a little bit more deeply than the second wave."
Full-time employment was down by 129,400 while part-time employment fell by 77,800 positions.
Biden says jobs report underscores need for his economic policies
U.S. President Joe Biden said after a disappointing U.S. jobs report issued on Friday that the figures underscored how vital his administration's economic actions are.
Biden said in a White House address the economy is moving in the right direction but has a long way to go and the report alsoshowed the economy is not at risk of overheating.
World stocks, commodities boom on U.S. weak jobs data
Commodity prices jumped, the dollar slid to a two-month low and major global equity indexes scaled record peaks on Friday after weak U.S. jobs data for April tamped down fears that a booming economy would spark inflation and higher interest rates.
The data eased worries the Federal Reserve would reduce its massive stimulus program anytime soon and was seen as helping President Joe Biden push through his plans for trillions of dollars in new spending on infrastructure and education.
The yield on the benchmark 10-year U.S. Treasury note slid to a two-month low of 1.469% before rebounding. Gold posted its biggest weekly gain - about 3.5% - since early November and copper shot to a new high, past a record set a decade ago.
Nonfarm payrolls increased by only 266,000 jobs last month. Data for March was revised down to show 770,000 jobs added instead of 916,000 as previously reported. Economists polled by Reuters had forecast payrolls would advance by 978,000 jobs.
A slower hiring pace doused fears a U.S. economy poised to roar on pent-up consumer demand would spur inflation and force interest rates higher.
IRS promote electronic filing
With the deadline for filing 2020 taxes looming, the IRS are encouraging indivduals to file electrolnically rather than via paper.
Are stimulus checks really necessary?
However while the stimulus checks remain a necessity for millions of American households, some research suggest that fewer people are spending the direct payments on essentials than was previously the case. A new survey from the New York Federal Reserve found that more people are saving their stimulus checks than in previous rounds of payment.
They found that, on average, recipients plan to use around 34% of the recent stimulus check to pay off outstanding debts and will save around 42% of the money they receive. The same study projected that only about 25% of the stimulus check payments would be spent immediately.
In passing the American Rescue Plan, Congress decided to tighten the eligibility restrictions for the third round of stimulus checks to ensure that higher-income earners would not receive the payments. However it does not appear that it had the desired effect and a smaller proportion of the money is being spent than in previous rounds.
In his speech to Congress the President praised the impact that the direct payments have had, but appeared unlikely to push for a fourth stimulus check.
On Thursday California’s Franchise Tax Board sent out 2.5 million Golden State Stimulus payments. Payments are scheduled to go out twice a month.
US Commerce chief cites auto chips shortage in jobs report
US Commerce Secretary Gina Raimondo said on Friday the semiconductor shortage was a factor in April's jobs report that showed hiring unexpectedly slowed.
The Bureau of Labor Statistics said the auto sector shed 27,000 jobs in April as automakers were forced to cancel production shifts and furlough workers amid the chips shortage.
"We're working very hard to get the president's plan passed in Congress to fund a semiconductor fund. The fact of the matter is we need to get back into the business of making more chips in America. And the supply chain issues are very real," Raimondo told MSNBC.
US court authorizes IRS to seek identities of taxpayers who have used cryptocurrency
A federal court in the United States has authorized the Internal Revenue Service (IRS) to serve a "John Doe Summons" on the crypto exchange Kraken, seeking identities of U.S. taxpayers who have used cryptocurrency, the Department of Justice said this week.
The IRS is seeking information about taxpayers who conducted at least $20,000 worth of transactions in cryptocurrency from 2016 to 2020, the DOJ said in a statement.
"Those who transact with cryptocurrency must meet their tax obligations like any other taxpayer", acting Assistant Attorney General David Hubbert of the Justice Department's Tax Division said in the statement.
US weekly jobless claims fall more than expected
Fewer Americans filed new claims for unemployment benefits last week as the labour market recovery gains steam amid an economic boom, which is being fuelled by a rapidly improving public health situation and massive government financial assistance.
Initial claims for state unemployment benefits totalled a seasonally adjusted 498,000 for the week ended May 1 compared to 590,000 in the prior week, the Labor Department said on Thursday. That was the lowest level since mid-March 2020, when mandatory shutdowns of non-essential businesses were enforced to slow the first wave of covid-19 infections.
Economists polled by Reuters had forecast 540,000 applications in the latest week.
9 days remain to file 2020 taxes
The IRS has reminded individuals that despite the March extension, the deadline for filing taxes (17 May) is looming.
After shock US jobs data, Republicans and Democrats spar over unemployment benefits
What did the disappointing U.S. jobs report on Friday say about the state of the world's biggest economy?
As is true for many things in Washington, the answer differs radically depending on which political party you ask. The Labor Department reported 266,000 new jobs were created in April, a fraction of the nearly 1 million jobs that were expected by a Reuters poll of economists. A drop in temporary help positions put a fresh focus on the generous unemployment benefits that the White House has championed as necessary to keep Americans financially whole as the country recovers from the impact of the coronavirus pandemic.
Many Republicans say the disappointing employment report signals that governments at the federal and state levels are being too generous with unemployment benefits, discouraging people from working. Democrats say companies aren't offering high-enough wages, or programs like subsidized childcare to encourage people to go back to work.
"The government pays people big bucks NOT to work so they don’t!," U.S. Representative Mo Brooks, a Republican from Alabama, wrote on Twitter. "DUH! Socialism seems nice but in fact is destructive. America: learn or lose!"
In the early days of the pandemic, a mix of inexperienced claimants and overwhelmed state unemployment agencies led to mistakes and a rash of overpayments.
The IRS will begin in May to send tax refunds in two waves to those who benefited from the $10,200 unemployment tax break for claims in 2020.
Stimulus checks live updates: welcome
Hello and welcome to our daily stimulus-checks live blog, which brings you the latest news on a possible fourth direct payment, in addition to updates and information on the third round of checks currently being sent out.
We'll also provide info on the Golden State Stimulus payments being distributed in California, as well as details on other economic-aid measures in the US, such as the expanded Child Tax Credit.