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Unemployment and Stimulus Checks: What’s the Connection?

Points to remember

  • A federal stimulus hasn’t been given to Americans in almost a year.
  • A near-term round is unlikely because of the solid job market.

The US economy was in bad shape when the American Rescue Plan was enacted in March of 2021. Not only were millions of Americans still unemployed, but the COVID-19 vaccine was only available to those at higher risk. As a result, many people found themselves where they couldn’t work even if they wanted to owe to health issues.

It was simple to justify the $1,400 stimulus checks that landed in Americans’ bank accounts in early 2021. On the other hand, the labor market is in much better form these days. While many consumers may be struggling with rising living costs, this is unlikely to be enough to justify another round of federal stimulus cash.

The unemployment rate has dropped significantly.

The national unemployment rate was 6% in March of 2021. That was a significant improvement from April 2020, when it was 14.7 percent. However, it was high when compared to pre-pandemic levels.

Meanwhile, the unemployment rate in the United States was only 3.6 percent in March 2022. That’s in line with the national unemployment rate before the COVID-19 issue (in February of 2020, unemployment sat at 3.5 percent ).

It’s difficult to justify another stimulus check because the US economy is in significantly better health in terms of unemployment. In reality, a stimulus package could exacerbate inflation to some extent.

Read More:- Stimulus Check: States Are Still Giving Out Up to $1,000 in Stimulus Money

The demand for commodities currently exceeds the available supply, one of the primary reasons for rising living costs. And one of the main reasons for the increase in consumer demand is that more people are employed and thus have more money to spend. If politicians inject even more money into the economy with a fourth stimulus package, the supply-demand gap will widen.

When will the expense of living become more manageable?

One thing that needs to happen is for supply chains to unclog and ramp up, which is still somewhat bottlenecked. As items become more widely available, demand should diminish, and prices should level off. Unfortunately, we may be in for a few months of high inflation before living costs stabilize. Consumers living paycheck to paycheck and having no savings to fall back on may suffer till then.

The good news is that work possibilities abound, so individuals in need of extra money may be able to find one by taking on a second job. But it isn’t an easy solution for everyone, and it’s easy to understand why so many Americans are frustrated by a lack of federal assistance when many are struggling to make ends meet.


While the federal government has no plans to provide more aid shortly, several states make payments to residents due to budget surpluses. It’s worth checking whether your condition plans to issue a rebate that may turn into a hefty payday shortly.

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