Stimulus Check News: Economic Situation Eases Slightly At End Of May 2022: But Low-Income Earners Continue To Suffer

Stimulus Check
Stimulus Check

The high rate of inflation eased a bit as consumers forged ahead in April and May and continued to spend money. There has been a 0.6% increase in wages and consumers had a marginal edge on prices that went up a mere 0.2%, well below the price increases of recent months, making the need for continued stimulus checks more urgent than before.

Spending increased 0.9% last month, way less than 1.4% in March, but way above the 0.7% expected by economists. People could save a mere 4.4% from their disposable income in April, which is less than half what it was a year ago. It is also the lowest since the depths the economy sunk during the last recession of 2008.

The numbers display a resilience shown by consumers in the face of soaring inflation,  and the GDP is expected to inch forward at an annualized rate of over 3% in the second quarter of 2022, after a drop in the initial quarter.

The Doubling Of Gas Prices Alone Necessitates A Stimulus Check At This Stage

Gas prices have more than doubled in two years, and have saddled millions of Americans who drive every day with enormous extra expenditure.

The price rise was fueled by a rare combination of geopolitical and economic changes that have manifested themselves in the high prices at the gas pump.

The availability of vaccines, and the rapid recovery experienced by the economy after the pandemic created a demand for gasoline and prices started inching up. It was followed by the war in Europe which led to global sanctions against Russia, the third-largest producer of oil in the world.

The prices continued to inch forward. While it was $1.94 in April 2020, it crossed the $4 mark and was even above $5 in California and other states.

Leaders around the country are split over the response expected to the high prices. While several governors have called for a suspension of gas taxes to temporarily lower fuel prices, the federal administration has cautioned that it will pull money away from road projects.

The release of gasoline from the Strategic Petroleum Reserve has eased prices a bit while easing of emission rules over the summer has led to an increase in the availability of gas. The Republicans have called for more domestic production to decrease an increased dependence on imports.

High Inflation And The Stimulus Check

The inflation report showed an annual decline, with the average monthly core inflation hovering around 4% of the annual rate, down from around 6% average in the 3 months before it. But at the same time inflation remains way higher than normal and the hike in Russia in fuel prices continues to impact energy and food prices. The federal administration has stated that talking about inflation continues to be its top economic priority.

While states have stepped in with various stimulus checks as a temporary measure, companies too are under pressure to offer a modest increase in wages to employees to counter the sustained high inflation rate in America.

Prices have risen across the board and have forced consumers to dip into their savings and have weakened their buying power. It has left millions of individuals and families struggling to pay even for their essentials.

But should the government intervene to ensure a fair wage instead of depending on the goodwill of the companies to ensure that citizens receive a fair wage?

There has been a sustained push for an increase in the minimum wages, but there appears to be little appetite to push for any significant transformation even as the country continues to be in the middle of economic recovery after the pandemic.

State Stimulus Checks To Be Paid In June

Two American states will give added COVID relief in the form of state stimulus checks immediately. Thanks to immediate action taken by the Governors of New Mexico and Maine, residents of these states will be given stimulus checks as soon as lawmakers have cooperated in the push for more relief measures given the highest inflation in 4 decades.

An $850 stimulus check will be sent in June to people who have already filed their income tax returns for 2021. Even as residents file their returns, more stimulus checks will be dispatched till the end of 2022.

Residents who file their returns by October will be eligible. They will not be allowed to claim as dependents on another person’s return and should have an AGI that is below $100,000 as individual filers and $200,000 as married couples who file jointly.

Heads of households with an AGI below $150,000 are also eligible for the Maine stimulus check. Around 858,000 residents of the state are expected to collect their stimulus checks. The state of Maine will incur a total expenditure of $729.3M.

New Mexico will also roll out its stimulus checks this month. The measure has been approved by lawmakers in the state earlier and will offer refund checks of $250 for individual filers and $500 for a married couple filing jointly.

The second payment of an identical amount is expected to be made in August. No separate application is necessary for the stimulus check. all residents of New Mexico who have filed their tax returns by May 31 will automatically receive their stimulus check from the state.

Other States Yet To Legislate On Stimulus Checks Of Their Own

While California, Colorado, Minnesota, Kansas, Pennsylvania, and Hawaii have considered identical stimulus check schemes for residents, these measures have yet to be put through the legislature of the respective states.

Federal funds have not dried up totally. Homeowners across America are eligible for stimulus checks under the Homeowner Assistance Fund initiated by the American Treasury Department.

The department revealed on its website that the purpose of the Fund is to avoid defaults, foreclosures, delinquencies, loss of home energy services and utilities, and displacement of owners who are experiencing financial hardship following the pandemic, afterJanuary 21, 2020.

The HAF funds are being prioritized for homeowners who faced the maximum hardship. National and local income indicators will be leveraged to capitalize on the impact of the fund.

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