Expanded unemployment payments included under the $2.2 trillion pandemic relief measure passed by Congress in March might be hindering U.S. economic recovery, according to Goldman Sachs.
“While the $600/week benefit top-up has been instrumental in stabilizing U.S. household income so far, it has also pushed the replacement ratio—benefits as a share of prior income—above 100 percent for many low-paid workers. If the measure is extended beyond its current July 31 end date, this will reduce the incentive to seek work as the economy opens up,” wrote Goldman Sachs Chief economist Jan Hatzius in a note to investors, according to Yahoo Finance.
