White House senior adviser Kevin Hassett on Monday said the U.S. economy is likely to contract by 20% to 30% in the second quarter, taking its biggest hit since the Great Depression.
“For second-quarter GDP it’s going to be the biggest negative number that we’ve seen since the Great Depression,” Mr. Hassett said on CNBC. “You’re looking at something minus-20 to minus-30 percent in the second quarter.”
Mr. Hassett estimated that the unemployment rate is at about 16% or 17% as the coronavirus pandemic wreaks havoc on the U.S. economy.
More than 26 million Americans have filed for unemployment over the last five weeks or so, which translates to about one-sixth of the U.S. workforce.
Mr. Hassett did say that the third quarter should be “pretty positive” and that places around the country appear to be learning safe practices.
He said localities across the U.S. with a higher percentage of “essential” employees reporting for work during the crisis had a higher rate of spread at one point.
“But the variance has really, really declined over time, suggesting that people have learned from Drs. [Deborah] Birx and [Anthony] Fauci about safe practices, that manufacturers and other essential services have figured out how to do it in a much more safe way than they were doing [it] three, four weeks ago,” he said.
He said if every business had been allowed to stay open the disease likely would have spread much more rapidly.
“But now the variation from places that are most open because they have lots of essential workers to least open - the variation is almost nonexistent,” he said. “And so it looks like people have figured out how to get back to work and to do so safely.”
Some analysts are hoping for a relatively quick, “v-shaped” economic recovery, though major business leaders have cautioned that a substantial bounceback is unlikely to happen before the fall.