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Here’s how much a reduction in extra unemployment benefits could slash consumer spending

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Until July 31, some 30 million jobless Americans received an extra $600 a week in unemployment benefits on top of what they would have received from their state as part of the $2 trillion CARES Act stimulus package that was passed in March.

As a result, the average amount of weekly unemployment benefits Americans received fell to $257 from $812, according to a paper titled “The Effect of Fiscal Stimulus: Evidence from COVID-19” circulated by the National Bureau of Economic Research on Monday.

If federal unemployment benefits were $200 a week, the researchers found that the replacement rate would decline by 44% and spending would fall by 28%. At $400 a week,…



Source marketwatch.com

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