White House senior adviser Kevin Hassett predicted Sunday that the economic news would get worse before it gets better, estimating that the unemployment rate will climb to 20% or higher in May or June as a result of the coronavirus economic fallout before rebounding.
“I’m looking for rates north of 20 [percent], sadly,” said Mr. Hassett on CBS’s “Face the Nation.”
The U.S. unemployment rate rose to 14.7% in April, the highest level since the Great Depression, according to Bureau of Labor Statistics figures released Friday, the result of the massive economic shutdown in response to the novel coronavirus outbreak.
Mr. Hassett cited the filing of initial claims for unemployment insurance currently arriving at a clip of about three million per week.
“I think that just looking at the flow of initial claims, that it looks like we’re probably going to get close to 20% in the next report, depending on whether the virus has really abated by that point and the economies are really going again,” said Mr. Hassett on CNN’s “State of the Union.” “Then it could head down from there.”
Mr. Hassett said he expected an upturn in the economic picture by mid-summer, citing the Congressional Budget Office’s forecast of a strong second-half rebound.
“I would guess that the middle of summer is when we’re going to start to go into the transition phase, and then I expect that by the second half of the year, the CBO forecast is what we hope will be right, which will be that we have very strong growth in third and fourth quarters,” he said.
He said the coronavirus outbreak resulted in “two giant forces colliding,” namely the strongest U.S. economy in history being hit by the biggest economic shuttering in history.
“Remember that we basically stopped the greatest economy ever to save lives,” Mr. Hassett said. “I think we’re very glad, we’ve saved lots of lives, we’re very glad that we’ve done that. Now we’re gradually turning the economy back on.”