White House economic advisers share contradictory tones on coronavirus impact
White House economic adviser Kevin Hassett painted a dire economic picture Sunday for the coming months because of the impact of coronavirus on businesses around the country.
Hassett predicted a very negative report on the economic output of the country.
“I think GDP (gross domestic product) growth in the second quarter is going to be negative big number. Wall Street estimates are 20, negative 20, negative 30% at an annual rate. And so that’s because we’ve done something that’s really unprecedented, we basically stopped everything,” Hassett told reporters Sunday.
Hassett separately said during an interview on ABC that he thought the country is going to see an unemployment rate comparable to the Great Depression.
“This is the biggest negative shock that our economy, I think, has ever seen. We’re going to be looking at an unemployment rate that approaches rates that we saw during the Great Depression,” Hassett said. “During the Great Recession, remember that was a financial crisis around 2008, that we lost 8.7 million jobs and the whole thing. Right now, we’re losing that many jobs about every ten days.”
While some private economists have predicted unemployment at that level, what is important is that these predictions are coming from a key White House economic adviser.
Some context: On Wednesday, the Commerce Department will release the nation’s first quarter GDP which will show the initial economic downturn due to the coronavirus.
Those figures will show the start of the economic slide, but the major impact will be seen in the numbers reflecting the second quarter GDP which will be released in July.
Treasury Secretary Steve Mnuchin, meanwhile, painted a more positive outlook on Sunday.
He told reporters he believes the economy will begin to bounce back this summer because of the economic activity that he hopes will occur in May and June, as some states begin to reopen.
“This is an unprecedented situation. This is not a financial crisis, this is — we shut down,” Mnuchin told reporters at the White House. “The traditional economic models may work. They may not work.”