Researchers say unemployment benefits have helped sustain the U.S. economy by giving people extra spending power. They've also helped families avoid sinking into debt: Overall borrowing went down and late credit card payments fell nearly 40% this spring.
The extra $600-a-week unemployment benefit has kept jobless people from plummeting into further debt and has allowed for sustained spending, a boon for the struggling economy.The extra $600-a-week unemployment benefit has kept jobless people from plummeting into further debt and has allowed for sustained spending, a boon for the struggling economy.Ordinarily when people lose their job, they spend less money.
"Unemployment benefits have been absolutely transformative for the households that have been able to receive them during this crisis," said Peter Ganong, who studied the spending patterns along with colleagues from the University of Chicago and the JPMorgan Chase Institute."It actually turns out that they're helping to sustain the U.S. economy as a whole."
"You just have a little bit more security," Mancuso said."You feel a little bit more comfortable. You can pay your bills and still have money. If you needed a pair of sneakers, you can go buy a pair of sneakers." As of last week, though, the extra $600 in federal help for the unemployed has run out. Mancuso's weekly benefit dropped from $873 to $273. He used the last of his extra federal money to pay this month's rent.
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