Consumption represents 70% of the US economy. So from a growth perspective, the most important COVID-19 programs voted by Congress are those impacting households through either direct transfers or support to their employers. These include transfers and unemployment benefits, the SBA PPP program, and the equity seeding of the Fed 13(3) facilities. Those have either already ended or will continue past end-year, even if Congress passes no new stimulus.
COVID-related household income support programs were down to about $30 bn in October, from a peak of $260bn in April. They could fall further to about $20 bn in December. This reflects the following:
One-off payments to households were fully implemented in April-May.
The $600 and FEMA-funded $300 weekly unemployment supplemental payments ended in July and September respectively
Regular state unemployment benefits, which last an average of 26 weeks, are running out. Extended COVID benefits (PEUC, Pandemic Emergency Unemployment Compensation) are increasing too slowly to compensate for the decline. This is partly due to slower but continued labour market improvement (Weekly Claims Point to Further Q4 Growth Risks, 6 November 2020).
Pandemic Unemployment Assistance (PUA) payments, a hybrid of welfare and unemployment insurance, are falling due to dropping claimant numbers (i.e., labour market improvements).
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