White House economic adviser Kevin Hassett said the pandemic could drive the U.S. economy into its biggest slump since the Great Depression, with a second-quarter contraction in output of up to 30 percent.
“Youre looking at something like minus 20 percent to minus 30 percent in the second quarter,” Hasset said on CNBCs “Squawk Box,” referring to the quarterly headline Gross Domestic Product (GDP) figure, adding, “For second-quarter GDP, its going to be the biggest negative number that weve seen since the Great Depression.”
Speaking of the jobless number for April, which will be released in the first week of May, the senior adviser to President Donald Trump said he expected it to come in at 16 or 17 percent.
In the past five weeks alone, the number of initial jobless claim filings totaled some 26.4 million, erasing all the jobs created since the Great Recession. The economic boom following the 2008 financial crisis was the longest in U.S. history when lockdowns, sparked by the outbreak of the Chinese Communist Party (CCP) virus, the novel coronavirus that emerged from Mainland China last year, brought it to a dramatic end.
In earlier remarks on ABCs “This Week,” Hassett said the nations economic outlook was in a “really grave situation.”
“Were going to be looking at an unemployment rate that approaches rates that I think we saw during the Great Depression,” he said. “During the Great Recession … we lost 8.7 million jobs in the whole thing … Were losing that every 10 days.”
Hassett said the severity of the outlook would depend on mitigating actions.
“A lot of it is going to depend on what we do next,” he said, adding, “We have to make sure that we have what it takes to prosper [to give the nation] the best chance possible for a V-shaped” recovery, referring to a sharp rebound in economic activity rather than a slow, U-shaped one.
“Make no mistake its a really grave situation,” Hassett added.
Expressing hope for a V-shaped bounceback, Treasury Secretary Steven Mnuchin told Fox News Sunday that the economy was going to “really bounce back” in the summer, citing efforts to reopen parts of the country combined with fiscal relief of historic proportions.
“As we begin to reopen the economy in May and June, youre going to see the economy really bounce back in July, August, September,” he told the outlet.
In his remarks to ABC, Hassett also pushed back on suggestions by Senate Majority Leader Mitch McConnell (R-Ky.) that cash-strapped states consider filing for bankruptcy.
“The state going bankrupt is something thats not really been anticipated by the Founders,” Hassett told ABC.