Stimulus' Boost Seen; How Long It Lasts Unsure

Economists debate impact, as inflation outpaces wage growth
By Kevin Spak,  Newser Staff
Posted Jun 27, 2008 2:22 PM CDT
Stimulus' Boost Seen; How Long It Lasts Unsure
Kelli and Mark Beaver of Duncannon, Pa., load thier purchases into the back of their red mini van at WAL-MART Supercenter in Mechanicsburg, Pa., Thursday, June 12, 2008.   (AP Photo/Carolyn Kaster)

The government's stimulus package has worked—for now at least, the New York Times reports. Spending rose 0.4% last month, the Commerce Department said today, buoyed by the $50 billion in checks sent to consumers. But subtract the stimulus, and income levels rose only modestly, and wage growth lagged well behind inflation.

“We’ve only started to scratch the surface on the effect … of the rebate checks,” said one economist. “Only a tiny fraction of the rebate checks have been spent.” But others say the rebate provided just a fleeting boost—and one argued the 0.4% surge was pretty puny “if you think about how much money was pumped out.” (More economic stimulus package stories.)

Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.