White House economic adviser Kevin Hassett told CBC’s “Face the Nation” on Sunday that he believes the unemployment rate could rise above 20% if the coronavirus-related lockdowns, which are now keeping millions of Americans out of work, continue for more than a few more weeks.
On Thursday, the Department of Labor revealed that more than 30 million Americans are now applying for unemployment insurance, that the unemployment rate is now a staggering 14.7%, and that nearly all gains in the job market in the last decade have been wiped out in the two months of coronavirus-related lockdowns, giving rise to the worst American unemployment numbers since the end of World War II.
Payroll numbers declined by 20.5%, ABC News reports, marking the “worst month of job losses in U.S. history.”
Hassett says he fears the economic toll of the virus could be even worse and that unemployment numbers are an unreliable measure of how many Americans are truly out of work.
“Right now, looking across the U.S., there are more than 30 million people that are getting initial claims from unemployment insurance, and that’s the biggest negative shock to the jobs market that we’ve seen since World War II,” Hassett said.
“To get unemployment rates like the ones that we’re about to see, to get back to your question, which I think will climb up towards 20% by next month, you have to really go back to the Great Depression to see that,” Hassett added. “I think you can expect to see jobs probably trough in May or June.”
The White House has been adamant that most Americans be allowed to return to work sooner rather than later, and has been encouraging states to “open up” so that small business owners and others struggling financially be allowed to serve customers and begin to recoup their losses.
Critics have said opening up too early could mean a second coronavirus “peak,” and warn that millions of Americans could die if proper precautions — including longer term lockdowns — aren’t left in effect. Many Democrats have suggested providing further funds to Americans, in addition to the $1,200 per person stimulus issued last month, but Republicans have questioned where that money would come from, given that the government is not collecting taxes from out-of-work individuals and shuttered businesses.
Hassett says there is hope, though, that with attention, the economy can begin to recover from the virus quickly.
“We built a bridge to the other side by having these small business loans,” Hassett said, referring to the Paycheck Protection Program, which recently received an influx of cash. “Right now, we have bought some time with all the money we have thrown at the economy.”
This week, Congress will debate a fourth coronavirus relief package, this one authored by Democrats and expected to cost the government more than $1 trillion.
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