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Savings of unemployed Americans nearly doubled amid COVID-19 aid: Study

JPMorgan Chase Institute research shows that the extra $600 in unemployment benefits was critical keeping Americans afloat during the pandemic. Yahoo Finance's Akiko Fujita and Brian Cheung discuss.

Video Transcript

AKIKO FUJITA: Well, a new study released out today points to just how the early economic relief early on in the pandemic helped Americans with their savings. And there are now concerns that could be depleted, with Congress still dragging their feet on a new stimulus measure.

Brian Cheung is here with that story for us. And Brian, I mean, how much are we talking about in terms of the hit that these people are taking to their savings as a result of no additional stimulus?

BRIAN CHEUNG: Well, Akiko, it means that the additional stimulus is incredibly critical for helping people bridge through the unemployment that they are continuing to sustain during this economic recovery. Keep in mind, more than 10 million Americans still out of work.

But this research coming from the JPMorgan Chase Institute, showing that the extra $600 a week in unemployment insurance actually helped Americans roughly double their liquid savings over the four-month period between March and July.

But more importantly, it also helped them spend during that period of time. So keep in mind that when they did get that $600 a week, it did show that unemployment spending among those people that had lost jobs actually increased by 22% after they started receiving those benefits.

But as we know, those benefits expired back in July. And what's interesting about this JPMorgan Chase data is it shows after that drop-off, spending among the same base of people-- again, those that had lost jobs-- actually declined by 14%.

And this is important, because during this economic crisis, the CARES Act was really supposed to support economic spending. That's how you get GDP numbers off. So it does show that we might be on the falling-down action here with no more further fiscal support, again, just increasing the onus on Congress to do something more as those negotiations continue down in Washington, DC.

AKIKO FUJITA: Yeah, no question. A good reminder there about who exactly that relief package does, in fact, benefit. Thanks so much for that.