Poorer U.S. households gained nearly a year's spending from CARES Act - study
Reuters
Published Jul 06, 2021 01:07PM ET
By Jonnelle Marte
(Reuters) - Federal aid distributed as part of the CARES Act boosted U.S. households' ability to pay their bills after becoming unemployed, with lower-income households seeing the biggest gains, according to research from the Federal Reserve Bank of San Francisco released on Monday.
The median household would have been able to maintain spending for an additional 15 weeks after losing employment income with help from enhanced unemployment benefits and the direct cash payments delivered as part of the relief bill, passed in March 2020 to support the economy through the COVID-19 pandemic.
Low-income households were able to maintain their spending for 43 weeks longer after losing their jobs than they could have without the support, the study found. For higher-income households, the benefits added a median of seven weeks of spending.
Enhanced jobless benefits had the biggest impact on what researchers called "household resilience," or the ability for people to keep paying their bills after losing employment income. The supplement, which tacked on $600 a week to state unemployment benefits from mid-April through July 2020, accounted for 85% of the change for lower-income households, they found.
Black and Hispanic households gained 19 weeks of resilience from the unemployment benefits, receiving a larger boost than white and Asian households.
Households in the South and the Midwest were less financially prepared to deal with job loss than those in the Northeast and the West, but the CARES Act narrowed some of those disparities.
The analysis focused on a sample of 10,613 heads of household and their spouses, using census bureau data. It did not factor in the aid provided after the CARES Act lapsed, which included more direct cash payments and an extension of enhanced jobless benefits.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.