Congressional Republicans and a handful of (irrelevant) liberal voices have grumbled that a $1.9 coronavirus aid package is just too big and may cause inflation, but today's report from the Labor Department should put that to rest.
Hundreds of thousands of people filed new claims for unemployment every week last month and the economy added just 49,000 jobs in January as more people became long term or indefinitely unemployed.
The sharp drop in the unemployment came as the labor force participation rate edged lower to 61.4% and 406,000 workers left the labor force. However, a more encompassing measure of unemployment that includes discouraged workers and those holding part-time positions for economic reasons also fell, dropping to 11.1% from 11.7% in December.
“Though we gained jobs in January after a December loss, this is not a we’ve-turned-the-corner report,” said Robert Frick, corporate economist at Navy Federal Credit Union. “We especially shouldn’t take solace that the unemployment rate fell dramatically given that’s mainly because more Americans dropped out of the labor force.”
Our economy and especially employment are driven by consumer spending and there's no better way to drive consumer spending than giving people money to spend.
That's exactly what happened last summer after the last significant aid package was pressed by Congress. People took their stimulus checks and bought shit we probably didn't need. But what everyone spent it on is irrelevant; the fact is we spent the money and almost all of it went back into the economy in one way or another.
Personally, every dime I've had in the last year went to food, clothing, or transition-related expenses and any future stimulus check would go toward the same things. That's consumer spending. Republicans would probably cringe if they knew a stimulus check partially funded my next laser treatment or my hormones -- can you even imagine the fiery floor speeches? -- but my doctor and her employees got paid for it and they used their own checks for something. Maybe they ordered takeout food as we've all been encouraged to do in support of our local economies. Anyone quibbling over the idea of giving people money they will spend on something or other is economically illiterate.
Giving people money is the quickest path to improving economic conditions.