Trump’s economic team braces for worsening job market in May
Washington — President Donald Trump’s top economic advisers on Sunday argued that a “safe” reopening of the U.S. is needed urgently as they stare down the worst job numbers since the Great Depression.
Meanwhile, although Trump has said he’s in no rush to enact another round of economic stimulus, the economic team said informal discussions are underway with members of Congress and others.
The April U.S. jobless rate, released Friday, tripled to 14.7%, the highest since the 1930s. And it’s only set to worsen in May as job cuts spread further into white-collar work.
Unemployment may peak “north of” 20% in May or June before the economy starts to come back from coronavirus-related shutdowns in the second half of 2020, White House adviser Kevin Hassett said on CBS’ “Face that Nation.”
The estimate was “not science as much as arithmetic,” based on the large numbers of people filing initial unemployment claims at the moment, said Hassett, a former chairman of the Council of Economic Advisers who returned to the White House to consult on virus-related matters.
Treasury Secretary Steven Mnuchin conceded on “Fox News Sunday” that the real unemployment rate could already be closer to 25%, based on 7 million additional workers who have lost jobs since the April monthly figures were compiled, and those who’ve stopped looking for work.
“Aren’t we talking close to 25% at this point?” Fox correspondent Chris Wallace asked the Treasury chief.
“Chris, we could be,” Mnuchin responded. “The reported numbers are probably going to get worse before they get better.”
Mnuchin and Hassett stressed that the jobs market collapse had come as a result of the deliberate shutdown of the U.S. economy to slow the spread of the coronavirus, not because of structural factors.
White House economic director Larry Kudlow said on ABC’s “This Week” that a “glimmer of hope” in the jobs figures was that about 80% of those tossed out of work were on furloughs or temporary layoffs. Still, May would bring “very difficult numbers,” he said.
Hassett said the Trump administration, Congress and the Federal Reserve have “built a bridge to the other side” of the COVID-19 pandemic with up to $9 trillion in economic stimulus programs so far, he said.
“Right now we’ve bought some time,” he said. Still, “Nobody knows for sure if it’s going to work,” he said.
The administration is preparing for either scenario — that “more bridge” will be needed, or that the economy will start to recover more quickly, he said.
Trump declared Friday he’s in “no rush” to pursue more stimulus measures, just hours after the Labor Department reported an unprecedented 20 million jobs were lost in April.
The contours and contents of a new economic aid package remain unclear and are expected to be subject to more partisan efforts than the measures enacted so far. Democrats, for example, want to send aid to struggling states, which Trump and many Republicans don’t.
“If we go to a Phase 4 deal, I think President Trump has signaled that while he doesn’t want to bail out the states,” Hassett said on CNN’s “State of the Union.” “He’s willing to help cover some of the unexpected COVID expenses that might have come their way.”
“Right now, the key is to watch the data and to make sure that the next move is as smart as the previous three,” Hassett said.
Kudlow said he and Hassett had a conference call with 50 House members, Democrat and Republican, on Friday and plan a similar call Monday with senators from both parties.
“We’re collecting ideas for next steps, which will be data driven,” Kudlow said. “We are talking; it’s informal at this stage.”
Mnuchin also said he was in discussions with lawmakers of both parties and that he and Trump were also “having conversations with outside people, with business.”
“We just want to make sure that before we jump back in and spend another few trillion of taxpayers’ money, that we do it carefully,” Mnuchin said.
Tony Czuczka contributed to this report