Number of the Day Shows Unemployed’s Shrinking Savings
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That’s how much jobless workers spent down their savings in August after the $600 weekly CARES Act supplement to unemployment benefits ended, a new study shows.
The extra unemployment income, combined with the government’s stimulus payments, helped those who were out of work roughly double their checking account balances between March and July, to a median of $3,770, according to an analysis released by the JPMorgan Chase Institute Friday. But by the end of August, a month after the $600 supplement ended, it had fallen back down to $2,540, the researchers said, citing data from a sample of Chase checking account customers.
“Eventually, without further government support or significant labor market improvements, jobless workers may exhaust their accumulated savings buffer, leaving them with a choice to further cut spending or fall behind on debt or rent payments,” the researchers wrote in a report.
If struggling households are forced to pare spending, it could put a dent in retail sales, which showed the strongest gains in three months in September, rising 1.9%.
JPMorgan Chase & Co. Institute. "The Unemployment Benefit Boost: Trends in Spending and Saving When the $600 Supplement Ended." Accessed Oct. 16, 2020.