Movers and SHAKERS
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Is a Fourth Stimulus Check Coming?
When previous stimulus payments hit the mailboxes and bank accounts of recipients three separate times since April of 2020, each time the stock market reacted positively. There are many stimulus initiatives currently being debated or active. Investors are wise to keep track of these initiatives, the immediate impacts and the long-term effects could again play a large part in market moves or economic growth.
Various Payments in Play
While almost $1 million jobs were filled in July, driving the unemployment rate down to levels comparable to 2015, there remain calls from both lawmakers and civilians for various new cash payments. Recently a petition has surfaced with nearly 3 million signatures calling for payments of $ 2,000 for adults and an additional $ 1,000 for children. There are a number of senators that support recurring these payments that would be triggered anytime the unemployment rate rises above 6%. Congress, for its part, is busy working on an infrastructure bill with the potential passage before the end of the month. It’s expected that there would be no movement on other agendas until that deal has been hammered out.
But there is still other money for many in the pipeline. The IRS continues to send additional “plus-up” payments for stimulus amounts owed and it is providing millions of families monthly cash through the extended child tax deduction.
“Thank you payments” in the amount of $1,000 are being sent to teachers and other school staff in several states. This would be funded by state and local governments which received from Washington $350 billion in aid as part of the U.S. rescue plan. Much of this aid will go to schools. Some states chose to offer their teachers and other school staff a “thank you” bonus of up to $1,000. The current states are Georgia, Florida, Tennessee, Colorado, Texas, and California. It’s expected that other states will approve similar disbursements. They have until 2024 to use the funds.
California will soon issue another round of “Golden State Stimulus Checks,” this will give $600-$1,100 to millions of residents meeting certain criteria. Golden State Stimulus II was approved under a $100-billion budget plan signed by California’s Governor. The stated goal is to spur the state’s economy following an extended period of economic shutdowns. California has approved two rounds of state-level stimulus payments to eligible residents. Nearly two-thirds of residents qualify for the payments. The checks will be available in September.
The President is asking states and cities to use “rescue funds” to send $100 payments to the newly inoculated against Covid. This is viewed not as a means to stimulate the economy but instead to stimulate an increase in interest in receiving the measure.
New rules for child tax credit give parents the potential to get monthly advances for extra cash in 2021, or a lump sum of up to $ 3,600 per child in 2022. The advance was a stipulation in The American Rescue Plan Act. The first monthly child tax credit payments were sent out in July.
Other Stimulating Proposals
Since the American Rescue Plan began being implemented in March, the White House has proposed two additional packages – the American Jobs Plan and the American Families Plan. There is no stimulus component to either. The current White House focus is on the infrastructure spending package. The President is said to be “open to a number of ideas” regarding stimulus aid.
Job openings are setting new records allowing opportunity for individual economic well-being and economic growth as a country. A total of 10.1 million positions were open in June. At the same time people are quitting their positions at a rampant pace. During May 3.9 million people quit their jobs. The amount resigning has averaged 3.6 million per month during the last quarter. As open positions rise, the resignations could indicate various personal decisions. For some it indicates confidence in the ability to find a suitable position elsewhere. For others it suggests they’re holding out for higher wages (which have been increasing). They might also just be burnt out, it has been a difficult year for many, particularly for hospitality and retail workers. A July survey from Joblist, found that one in three service workers wouldn't return to the industry, and half wouldn't return to their old roles. Their reason was unsatisfactory pay, conditions, and benefits.
The economy is being managed quite different than at any other time in U.S. history. The creation of money and redirection from some segments to others provides many obvious opportunities. While it is easy to see how a subsidy to an industry could help the industry, and create opportunity, money placed in the hands of individuals also could have pronounced effects on segments of the market where the cash is likely to be spent.
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