As Congress and the White House resume their efforts to agree on a new economic aid package, evidence is growing that the U.S. economy is faltering.
“We’re in a pretty fragile state again," warned Nancy Vanden Houten, lead economist at Oxford Economics, a consulting firm. “The economy needs another shot in the arm.”
The debate coincides with worrisome signs about the job market and the economy. The number of laid-off workers who have applied for unemployment benefits has topped 1 million every week for 18 straight weeks. Before the pandemic, that figure never exceeded 700,000. Real-time data shows that Americans' visits to shops and restaurants have leveled off after having grown in May and June. Air travel fell last week compared with the week before.
The Democratic-led House has already approved legislation that would extend the $600 through January. Research has shown that, counting the $600 a week in federal aid, roughly two-thirds of those out of work are receiving more money from their jobless benefits than they earned at their previous jobs. That conclusion has fueled Republican concerns that the extra aid has discouraged some of the unemployed from returning to work, potentially slowing the recovery.
William Spriggs, chief economist at the AFL-CIO, argued that the 7.5 million jobs that the economy added in May and June suggest that most of the unemployed will take a job offer when unemployment is high, because they know another opportunity may be hard to find.
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