Trump's economic adviser Kevin Hassett says double-digit unemployment may remain till Election Day
White House economic adviser Kevin Hassett on Sunday, May 24, made a forecast that would rattle the Donald Trump administration. He said the unemployment rate in the US could still remain in the double digits by Election Day which is November 3. The country has seen a massive economic turmoil in the wake of the Covid-19 outbreak with nearly 40 million having lost their jobs and little assurance about when things will get better.
Hassett, who took over in April after returning to the White House temporarily to advise Trump on the economic policy in the middle of the Covid-19 pandemic, said on CNN’s State of the Union that he expects the unemployment rate to rise to “north of 20 percent in May” and that it may not go below single digits by fall. Shutdown across the US because of the pandemic saw the unemployment rate in the US skyrocketing to 14.7 percent in April from 3.5 percent in February. The rate is likely to go up even further and while many have expressed optimism that the country could see a fast turnaround, Hassett said the recovery might be a time-taking procedure.
“Yes, unemployment will be something that moves back slower,” Hassett said when asked if a double-digit unemployment rate could remain in November. “I think it could be better than that. But you’re going to be starting at a number in the 20s and working your way down,” he said. “So, of course, you could still not be back to full employment by September or October.”
Earlier in May, Hassett said in an interview with CNN that the US was "looking at probably the worst unemployment rate since the Great Depression’. “It’s a tremendous negative shock, a very, very terrible shock,” he said. In his latest remarks, the former chairman of the White House Council of Economic Advisers said he would have been far more optimistic about the economy’s recovery if a vaccine became available in the near future. He said the economy can recover at a brisk pace as consumers are ready to lead a normal life again.
Trump was banking on economy to win election
Hassett’s gloomy prediction over the state of the economy at the time of the high-profile election is found to leave the Trump administration a troubled lot. While the incumbent president was banking on the robust economic functioning as one of the top factors that would see him through the polls, the Covid-19 pandemic turned the plan upside down. While the death toll has increased at a rapid pace in the US because of the virus, the job losses have been equally fast and the dual challenges have left Trump and his policy-makers under a massive challenge.
Hasset, however, aired optimism when he said that he expected the signs of economic recovery to be “raging everywhere” by November, Hassett told CNN. "The only thing we're really going to be debating as economists is, 'Are we going to get back to where we were [and] is it going to be a long haul to get there?" he said. "I have two very close friends—both conservatives, both Harvard professor—and one of them thinks it's going to take many many years, and the other one thinks it's going to happen virtually overnight."
“That other friend, Robert Barro, has said that he thinks it looks a little bit like the end of World War II: the countries that didn't have their capital stocks destroyed by the war, when [it] ended, they pretty much got their economies going at a rate of 40 or 50 percent a year. Our capital stock hasn't been destroyed, our human capital stock is ready to get back to work, and so there are lots of reasons to believe that we can get going way faster than we have in previous crises,” Hassett said.