Key Highlights
- Trump’s top economic advisors bracing for unemployment rate to climb +20% in coming months
- US Labor Department’s latest report put unemployment rate in April at 14.7%, highest level since Great Depression
- COVID-10 pandemic continues to stifle economic activity and wipe out jobs
US Treasury Secretary Steven Mnuchin was quoted on Sunday morning shows as saying that job figures could get worse before they get better. (The US Labor Department’s April jobs report indicated an unemployment rate of 14,7%, the highest level of unemployment since the Great Depression.) Mnuchin said that adding the workers who are currently under-employed to those who are currently without any work at all would generate a real unemployment rate… a real unemployment rate that could soon reach 25%.
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The White House has been encouraging governors to begin reopening their states quickly. Mnuchin added to current White House comments by suggesting that not reopening states could cause “permanent” damage to the economy and that that damage may ultimately cause greater risk (to the health of the country) than not reopening. “Unlike the Great Depression,” Mnuchin added, “where you had economic issues that led to this, we closed down the economy.”
Other top staffers to the president agree. Kevin Hassett, a White House economic advisor, said, “We think that we have a little bit of a moment – the luxury of a moment – to learn what’s going on…” in terms of what, if any, economic boosts states experience as they begin to reopen. That said, Hassett still predicted the jobless rate could hit 20% in May and that pandemic restrictions could be reactivated if COVID cases begin to spike again.
Neel Kashkari, the president of the Federal Reserve Bank of Minneapolis, believes that COVID outbreaks, lockdowns and work returns would likely continue in phases over “a year or two” and that “the worst is yet to come on the job front, unfortunately. To solve the economy, we must solve the virus. Let’s never lose sight of that fact.”
Thanks to the New York Times.
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