Former PIMCO CEO Mohamed El-Erian said Sunday that the economic picture in the U.S. would likely “get bad at a slower rate” in the future after unemployment soared to its highest rate since the Great Depression.
Asked by Fox’s Chris WallaceChristopher (Chris) WallaceBiden vaccine mandate puts McConnell, GOP leaders in a tough spot The Hill's Morning Report - Presented by National Industries for the Blind - Biden's .5 trillion plan will likely have to shrink Breyer says term limits would 'make life easier for me' MORE whether the employment situation was likely to “get brighter,” El-erian responded “it will get brighter in the sense that it’ll get bad at a slower rate, but we should not forget how bad this picture is.”
“With the additional 3 million, Chris, that is 36 million people have signed up for – on jobless claims for – in eight weeks. That’s one-quarter of our labor force. So it’s an enormous shock,” he said on “Fox News Sunday.”
He said that so far, "we haven’t had government stimulus, we’ve had government relief."
“So we are hurting, and thank God that Washington has reacted on their relief measures,” he added. “What’s important now is not to lose sight that there’s a second phase. This is not just about winning the war against a global depression and a U.S. depression, this is about securing the peace, about making sure that we emerge from this also strong.”
El-Erian noted that “this week also gave us not just a horrible unemployment number, but the worst industrial arc of collapse in a century, and the worst retail sale collapse on record,” indicating future spending packages should address deeper structural issues affected by the coronavirus pandemic.
To ensure a meaningful second round of funding, he added, “the next stage has to also focus on key issues like infrastructure, labor retailing and retooling, safety nets -- things that are going to be critical if we are to bounce back in a sustainable manner. Otherwise we’re going to get stuck in a new normal of really mediocre growth and greater social tensions.”