The US has shown an improvement in the economic recovery after the crisis caused by the COVID-19 pandemic. The unemployment rate has gradually decreased in recent months to 5.4% in July.
The Government of the US President, Joe Biden, will not seek to extend the reinforcement of $ 300 a week in the unemployment subsidy that expires on September 6, given the improvement in the economic recovery after the crisis caused by the COVID-19 pandemic.
"The $ 300 endorsement will expire on September 6, as scheduled," Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh sent to the Senate finance committee in a joint letter.
As President Biden has stated, he added, the promotion was always made temporarily, and that this benefit is appropriate to end.
The unemployment rate has dropped gradually in recent months in the US to 5.4% in July after it soared above 10% in 2020 with the arrival of the pandemic and the mobility restrictions imposed to contain its expansion.
Last month, the world's largest economy added 943,000 jobs, the highest number since September 2020. The number of unemployed was 8.7 million 782,000 less than the previous month
Most analysts expected an unemployment rate of 5.7% with the sum of 983,000 jobs.
Although the numbers have dropped considerably since the end of the recession between February and April 2020, they are still well above the pandemic's start.
Yellen and Walsh specified that "some states" can use part of the federal funds approved during the last rescue package for state and local entities worth 350,000 million dollars to extend this aid.
And so, they stressed, giving residents of those states "a little more time to find a job in areas where unemployment is still high ."
Several states, the majority governed by Republicans, decided to cut this aid at the beginning of summer due to some businesses' difficulties finding employees, something for which they blamed this support for discouraging the job search.
The Federal Reserve (Fed) expects the US economy to grow this year at about 7%, which would be the highest since the 1980s. It expects unemployment to close the year at 4.5%.
On the other hand, the Fed is considering starting the withdrawal of monetary stimulus by reducing its monthly bond purchase program at the end of the year if the economy maintains the expected rate of expansion, according to the minutes of its meeting last month.
At the meeting, members of the Federal Open Market Committee of the Fed, which directs monetary policy, discussed the possibility of a first reduction in the volume of monthly bond purchases, currently located at 120,000 million dollars.
"Looking ahead, most participants indicated that, if the economy evolves in a general way as anticipated, it might be appropriate to start reducing the pace of asset purchases this year," said the document, released this Wednesday and that collects the meeting of last July 27 and 28.
The US central bank highlighted the progress made towards its dual objective of price stability and promoting full employment.
However, they stressed that the reduction in the purchase rate of bonds does not imply a "mechanical link" with an increase in interest rates.