UNEMPLOYMENT

Could the unemployment rate affect a future fourth stimulus check or other benefits?

The underwhelming September jobs report has seen renewed calls for additional federal support programmes, but the White House insists it is not neccessary.

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Could the unemployment rate affect a future fourth stimulus check or other benefits?
OLIVIER DOULIERY AFP

On Friday the Bureau of Labor Statistics released the jobs report for September, which showed that just 194,000 new jobs were added that month as the nation’s economic recovery continues to stagnate.

That represents little more than half the number that were added in August, and considerably less than the 1.1 million that were added in July. The September figures fell short of economists’’ predictions and have sparked concern, with the more dangerous winter months ahead.

In response to the underwhelming statistics many lawmakers have called for additional forms of financial support to be introduced, replacing some that have been removed in recent months.

Progressives argue high unemployment requires additional benefits

The September jobs report shows that the unemployment rate has fallen to 4.8%, another slight improvement but still considerably higher than the pre-pandemic level of 3.5%. Businesses are hiring, but with the number of people still out of work still dangerously high some have questioned the decision to end the additional unemployment benefits last month.

Ben May, director of global macro research at Oxford Economics, has authored a report on the job instability caused by the Delta variant, which claims: "Uncertainty and hesitancy may ultimately lead to a more slow-burning recovery from here than our baseline assumes.”

Around 9.1 million people lost their additional unemployment benefits on Labor Day when the additional programmes ended and Rep. Alexandria Ocasio-Cortez has argued that there was no justification for ending the support at that time.

She tweeted: “You can’t force people to work a job that doesn’t pay enough to live. This isn’t hard… Letting PUA expire was based on fantasy, not data. We must restore it.

White House unconvinced by calls for additional support

The prospect of a fourth stimulus check has been mooted for months but has failed to gain any mainstream support in Congress, with progressive Democrats the only ones to call for additional direct payments. The White House, crucially, has been unwilling to push for a fourth stimulus check, focusing instead on President Biden’s Build Back Better legislative agenda.

The Biden administration is looking for more long-term forms of financial support, such as an extension to the Child Tax Credit expansion which has been in place since July. It remains to be seen if the additional benefits for parents will be included in the reconciliation bill, after Sen. Joe Manchin stated his reluctance to support a proposal which extends the programme.

In terms of unemployment benefits, Biden’s Labor Secretary Marty Walsh has insisted that, despite the modest growth in September, further support is not needed.

"We're heading in the right direction," he told Business Insider. "The unemployment benefit was there because in the beginning tens of millions of Americans were out of work overnight."