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When states began cutting off federal unemployment benefits this summer, their governors argued that the move would push people to return to work, the New York Times reported. New research suggests that ending the benefits did indeed lead some people to get jobs, but that far more people did not, leaving them — and perhaps also their states’ economies — worse off. A total of 26 states, all but one with Republican governors, have moved to end the expanded unemployment benefits that have been in place since the pandemic began. Many business owners blame the benefits for discouraging people from returning to work, while supporters argue they have provided a lifeline to people who lost jobs in the pandemic. The extra benefits are set to expire nationwide next month, although President Biden on Thursday encouraged states with high unemployment rates to use separate federal funds to continue the programs. To study the policies’ effect, a team of economists used data from Earnin, a financial services company, to review anonymized banking records from more than 18,000 low-income workers who were receiving unemployment benefits in late April. The researchers found that ending the benefits did have an effect on employment: In states that cut off benefits, about 26 percent of people in the study were working in early August, compared with about 22 percent of people in states that continued the benefits. But far more people did not find jobs. In the 19 states ending the programs for which researchers had data, about two million people lost their benefits entirely, and a million had their payments reduced. Of those, only about 145,000 people found jobs because of the cutoff.

Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh said Thursday that the Biden administration will not seek an extension of pandemic jobless aid programs but encouraged states to use funding from the $1.9 trillion stimulus package to support unemployed workers, The Hill reported. In a letter yesterday to congressional leaders, Yellen and Walsh said it is “appropriate” for a $300 weekly boost to unemployment insurance and other expanded benefits programs to expire as scheduled on Sept. 6. “The temporary $300 boost in benefits will expire on September 6th, as planned. As President Biden has said, the boost was always intended to be temporary and it is appropriate for that benefit boost to expire,” Yellen and Walsh wrote to Senate Finance Committee Chairman Ron Wyden (D-Ore.) and House Ways and Means Committee Chairman Richard Neal (D-Mass.). “In addition, President Biden believes that the conditions exist in many states such that the other emergency UI [unemployment insurance] programs ... can end on the date set in the American Rescue Plan,” they continued, referring to the $1.9 trillion stimulus bill Biden signed in March. The March stimulus bill extended the $300 weekly supplement, the Pandemic Unemployment Assistance program for gig workers and contractors and Pandemic Emergency Unemployment Compensation — which provides up to 53 weeks of additional aid — through Labor Day.

New home construction fell 7 percent in July as builders tackled massive backlogs over newer contracts, according to data released yesterday by the Commerce Department, The Hill reported. Housing starts for privately owned homes hit a seasonally adjusted annualized rate of 1.53 million in July, falling below the revised June rate of 1.65 million while remaining 2.5 percent above the same month last year. Single-family housing starts were down 4.5 percent, and starts on homes with five or more units plunged 13.6 percent. Home sales and construction have fallen steadily throughout the summer after surging lumber prices earlier in the year drastically increased the cost of building homes. While lumber prices have fallen closer to historic levels, home prices have continued to break record highs as builders fight through other supply issues and backlogs.

Production at U.S. factories surged in July, boosted by an acceleration in motor vehicle output as auto makers either pared or canceled annual retooling shutdowns to work around a global semiconductor shortage, Reuters reported. Manufacturing output jumped 1.4% last month after falling 0.3% in June, the Federal Reserve said yesterday. Last month, production at auto plants soared 11.2%. The shortage of semiconductors has forced auto companies to adjust their production schedules. The Fed noted that "a number of vehicle manufacturers trimmed or canceled their typical July shutdowns," when they retool their plants. Despite the surge, production of motor vehicles and parts in July was about 3.5% below its recent peak in January 2021, the Fed said. Excluding autos, manufacturing output rose 0.7% in July. Overall manufacturing in July was 0.8% above its pre-pandemic level. Manufacturing, which accounts for 11.9% of the U.S. economy, is being underpinned by strong domestic demand. But that is straining the supply chain, leaving manufacturers struggling with shortages of raw materials and labor.

More than 7 million Americans are set to lose their unemployment aid immediately after Labor Day, even as the delta variant poses new challenges to the economic recovery, The Hill reported. Gig workers and other unemployed Americans receiving aid through programs created for the pandemic will see those checks end on Sept. 7, along with the $300 weekly federal supplement to traditional jobless benefits. President Biden had all but formally ruled out an extension before the delta variant caused COVID-19 cases to surge, saying in July it would “make sense” for those programs to lapse in September. But as cases climbed, White House press secretary Jen Psaki left the door to an extension open, telling reporters on Aug. 6: “At this point, they're expiring at the beginning of September. Nothing has changed on that front, but a final decision has not been made.” Even if Biden decides he wants to change course, Congress would need to pass legislation. And a bill to extend unemployment benefits would almost certainly face universal GOP opposition. Sen. Joe Manchin (D-W.Va.) has also spoken out against extending pandemic jobless aid programs, dashing the chance of an extension through the pending reconciliation spending bill that would require only a simple majority for passage in the 50-50 Senate.

House Speaker Nancy Pelosi (D-Calif.) on Sunday floated a procedural move on the bipartisan infrastructure bill, but the idea did not satisfy a group of moderates who are pushing for a quick vote on passage of the measure, The Hill reported. The House is returning to Washington, D.C., next week in order to pass the Senate-approved $3.5 trillion budget resolution that will pave the way for a social spending bill that can pass with only Democratic votes. Some moderate Democrats are seeking an immediate vote on the bipartisan infrastructure bill that the Senate passed earlier this month and have threatened to vote against the budget resolution unless the House first votes on the infrastructure bill. But Pelosi and progressive lawmakers do not want the House to pass the infrastructure bill until the Senate also passes a social spending bill. In an effort to take moderates’ priorities into account, Pelosi said in a letter to colleagues Sunday that she has asked the House Rules Committee to “explore the possibility of a rule that advances both the budget resolution and the bipartisan infrastructure package.” “This will put us on a path to advance the infrastructure bill and the reconciliation bill,” she wrote.