I suppose it 'stimulates' the economy more than having them just sitting on the curb and stare at the pavement, since at least they buy necessities and pay rent with the UE checks, although 'keeps the economy on life support' would be a more appropriate phrase.
Still, it doesn't stimulate the economy nearly as much as them having real jobs and doing something productive during the day, instead of sitting on their asses at home watching cable TV or surfing porn sites.