The expiration of unemployment benefits has already put a squeeze on the U.S. economy, economists at Deutsche Bank say.
The $600-a-week supplement to unemployment benefits issued during the coronavirus pandemic lapsed at the end of July. President Donald Trump on Sunday signed a measure offering what amounts to a $300 federal boost to the benefits, though the funds may take more than a month to arrive.
Congress' failure to renew the benefits has resulted in reduced consumer spending.
"The evaporation of these benefits highlights near-term downside risks to consumer spending, particularly for lower-income households, which have been a critical engine of the recovery despite being disproportionately more likely to lose a job during the pandemic — a testament to the effectiveness of the income supplement," the economists noted per Axios.
Consumer spending in June was 5 percent above pre-Covid levels, fueled by the largest government stimulus in U.S. history, according to Forbes.
Republican and Democratic lawmakers continue to clash over federal unemployment benefits with no end in sight.
Solange Reyner ✉
Solange Reyner is a writer and editor for Newsmax. She has more than 15 years in the journalism industry reporting and covering news, sports and politics.