Officials warn of worsening economic woes after dismal April jobs report
Officials warned Sunday that economic challenges could become more dire after an April jobs report from the Bureau of Labor Statistics (BLS) showed a record 20.5 million Americans lost their jobs last month.
The 14.7 percent unemployment rate is the highest ever recorded by the BLS, and the one-month rise in the unemployment rate and the one-month decline in jobs also shattered records.
But White House adviser Kevin Hassett said the unemployment rate will continue to rise in May and June and could reach 20 percent.
Hassett said on CNN’s “State of the Union” that the unemployment rate will depend on whether the virus “has really abated” and if economies are “really going again.”
“I would guess middle of summer is when we’re going to start to go into the transition phase,” he said, adding that he hopes there will be “very strong” growth in the third and fourth quarters.
White House economic adviser Larry Kudlow similarly warned that May will be difficult, noting that it may take time for reopening efforts in some states to have a positive effect on the U.S. economy and unemployment.
“I don’t want to sugarcoat it because I think those numbers for May are gonna be also very difficult numbers,” he said on ABC’s “This Week.” “It’s going to take a while for the reopening to have an impact, so there’s that.”
And the president of the Federal Reserve Bank of Minneapolis warned that the “worst is yet to come” in terms of job loss.
“We may be in an environment of gradual relaxing and then having to clamp back down again around the country as the virus continues to spread,” Neel Kashkari said on ABC’s “This Week.” “To solve the economy, we must solve the virus. Let’s never lose sight of that fact.”
But Kudlow said there’s a “glimmer of hope” in the unemployment data, noting that 80 percent of unemployment claims involved those who were furloughed or experiencing temporary layoffs.
The April jobs report comes as most states are taking small steps toward restarting public life, allowing some businesses to reopen with restrictions while still urging Americans to use caution and continue practicing social distancing.
Treasury Secretary Steven Mnuchin on Sunday said reopening the economy amid the pandemic should be done in a “thoughtful way” to avoid further economic damage. But he also warned that there is a risk in keeping businesses closed.
“I think there’s a considerable risk of not reopening. You’re talking about what would be permanent economic damage to the American public,” he told Chris Wallace on “Fox News Sunday.”
“We’re going to reopen in a very thoughtful way that gets people back to work safely, that has them social distance,” Mnuchin added.
But as states lift restrictions in efforts to reopen the economy, public health experts warn that there may be a corresponding increase in the number of coronavirus cases.
Christopher Murray, director of the Institute for Health Metrics at the University of Washington, said on CBS’s “Face the Nation” that social distancing was shown to help stop the spread of COVID-19 transmission.
“Now that we’re coming out, the big question mark is will people’s own behavior — acting responsibly, wearing a mask, avoiding coming into physical close contact — will that be enough to counteract the effects of rising mobility?” he asked. “
“Our suspicion is there will be about 10 days from now in these places that have had these big increases in mobility we are expecting to see a jump in cases,” he added.
Columbia University infectious diseases expert Jeffrey Shaman similarly predicted Sunday the U.S. will see an increase in COVID-19 cases as some states loosen restrictions.
“What I think we are probably going to see over the coming weeks towards the end of the month is we are just going to start to see a growth in cases,” he said on NBC’s “Meet the Press.” “It’s not going to happen over the next week or two. It’s going to come in with a lag because there are lags in the system. And that is that the people who get infected today, we don’t see them as confirmed cases for another couple weeks. And that built-in delay means that any changes that we do to social distancing because of reopening, we are not going to realize for a couple weeks until we’re already into some period of growth.”
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