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The Senate is now returning back to session and so once again we will await more stimulus talks to see what is going to happen.
We’ve already heard from Senate Majority Leader Mitch McConnell who proposed passing a limited bill by the end of the year.
Mitch McConnell is now stressing the lowering unemployment rates as a justification for a smaller package.
“It turns out the news [regarding unemployment] is a whole lot better lately,” said McConnell.
“I hope our Democratic colleagues will finally put aside their all-or-nothing obstruction and let the targeted pandemic relief—targeted pandemic relief is what we need—let it move forward.”
Of course, this is the third time that he has floated the idea of a “skinny” stimulus package and the prior two times failed pretty much immediately.
But this time it could be different.
The unemployment figures are worth mentioning because unemployment continues to drop at a pretty fast rate.
The civilian unemployment rate was at 6.9% for October which is much improved from the peak of the pandemic which was close to 15%.
While we are not back down to where we were prior to the outbreak of the pandemic we are about where we were in the fall of 2013 — a good five years after the financial crisis.
And if you look at the rate that the unemployment is dropping, it is a near vertical drop that almost mirrors the rise that occurred earlier this year as the pandemic broke out.
So I do think that it is important for us to consider the declining unemployment rates when deciding on an additional stimulus package.
What’s not clear is the impact that a declining unemployment rate will have on stimulus talks.
If more people are employed then there is a smaller need for unemployment benefits in terms of the number of individuals receiving the benefit but the question is, how much does it affect the amount each eligible individual can receive?
Would there still be talks about a $600 per week bonus or would it be capped at lower amounts that have been discussed such as $200 or $400?
In addition to that, there is the stimulus check question of when will stimulus checks be needed if unemployment continues to drop to more “acceptable” rates?
It looks like Republicans will still maintain control of the Senate so if these numbers continue to look good, the reality of a smaller stimulus bill might be more likely.
The longer that we wait for a bill to pass, the better some key figures like unemployment might look which could reduce the potential payouts.
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Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. Since 2014, his content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.