Stimulus Update: 4.5 Million Reasons Why We Probably Won’t See a Stimulus Check in 2023

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Don’t start banking on that money. 

When lawmakers approved the American Rescue Plan in March of 2021, it gave a lot of people a reason to celebrate. Not only did that massive stimulus package allow for a round of $1,400 stimulus checks, but it also gave the Child Tax Credit a major boost.

All told, the federal stimulus aid consumers received in 2021 helped many shore up their savings and cope with inflation as it started to soar. But there wasn’t any federal stimulus aid to be had in 2022. Rather, the most consumers were privy to was limited state stimulus aid, which left many Americans out in the cold.

Of course, it’s easy to see why lawmakers didn’t approve any federal stimulus aid in 2022 — economic conditions didn’t warrant it. Even though inflation hurt a lot of people last year, consumer spending held steady and the unemployment rate stayed nice and low.

Now there is talk about a potential recession in 2023. In fact, some financial experts are downright convinced that economic conditions will deteriorate within the next 12 months to some degree.

But even if that happens, there’s a good chance consumers still won’t see more stimulus checks hit their bank accounts. Here’s why.

Job growth soared in 2022

Historically, lawmakers have approved stimulus aid during periods of economic distress and high levels of unemployment. But we’re unlikely to reach a joblessness crisis anytime soon.

The reason? The U.S. economy added a whopping 4.5 million jobs in 2022. That’s the second-highest total on record aside from the job growth experienced in 2021, when the economy was in catch-up mode on the heels of the pandemic.

Meanwhile, as of the end of 2022, the national unemployment rate sat at 3.5%. That’s the lowest number on record in about 20 years.

All told, things are looking pretty solid from an unemployment standpoint right now. And so even if a recession does hit in 2023, unless that downturn is catastrophic, it probably won’t drive unemployment up enough to warrant a round of federal stimulus aid. It may not even warrant a boost in unemployment benefits — something workers were entitled to in 2020 when the jobless rate started to soar.

One silver lining

It may be disappointing to hear that a federal stimulus check is unlikely in 2023. But on a positive note, inflation seems to be steadily cooling after peaking last summer. And if that pattern continues, consumers might get some relief from higher living costs.

That’s not the same thing as getting a direct payday from the government. But ultimately, both achieve the same purpose of making it easier for consumers to cover their bills.

Furthermore, recent holiday spending data shows that consumers did not cut back during the 2022 season as many economists thought they might. In fact, consumers actually wound up spending more. That’s a sign that we may not be on the verge of a recession as some economists think we are. And that’s always a good thing to hear.

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