The U.S. economy is experiencing the “biggest negative shock” it has likely ever seen, with the country’s unemployment rate approaching the level last seen during the Great Depression, an economic adviser to President Donald Trump said Sunday.
“Make no mistake, it’s a really grave situation,” White House senior adviser Kevin Hassett said on ABC’s “This Week” when asked about the current economic outlook and Trump’s hope for a sharp, V-shaped recovery.
“We’re going to be looking at an unemployment rate that approaches rates that we saw during the Great Depression,” he said. “During the Great Recession, remember that was the financial crisis around 2008, that we lost 8.7 million jobs in the whole thing. Right now we’re losing that many jobs about every 10 days. So the lift, the economic lift for policymakers is an extraordinary one,” he said.
Roughly 26 million people have filed for unemployment benefits in the U.S. since the coronavirus outbreak began, with economists forecasting the unemployment rate to be as high as 20% this month. The Great Depression, for comparison, saw unemployment peak around 25% in 1933.
Hassett, who is the former chairman of the Council of Economic Advisers, said that it will be up to both Republicans and Democrats to determine what happens next “to give us the best chance possible for a V-shaped recovery.”
This sobering analysis by Hassett came as Treasury Secretary Steven Mnuchin offered a far more rosy forecast that relied on financial boosts being injected into the economy.
In an interview with Fox News Sunday, Mnuchin told host Chris Wallace that he expects the economy will “really bounce back” through July, August and September thanks to stimulus checks being sent to Americans and loans being offered to small businesses through the replenished Paycheck Protection Program.
Mnuchin, in his public comments, has remained hopeful throughout these past several weeks. Back in March, he said he didn’t expect an economic recession, only a “slowdown.”
“We are putting in an unprecedented amount of fiscal relief into the economy,” Mnuchin said Sunday. “You’re seeing trillions of dollars that’s making its way into the economy and I think this is going to have a significant impact.”
When confronted by Wallace with contrasting assessments — including Goldman Sachs recently predicting the global hit from the coronavirus to be four times worse than the 2008 recession — Mnuchin said: “We’ll see.”
“As businesses begin to open, you’re going to see the demand side of the economy rebound,” Mnuchin said.
Expedia and IAC Chairman Barry Diller, also sharing his economic expectations Sunday, gave a contrasting downcast view, with the billionaire businessman telling CBS’s “Face the Nation” that “there’s no chance” of a rebound by the fall.
“Anyone who thinks that this economy is going to bounce … it can’t. The damage that is being done is catastrophic,” he said.