US White House Economic Advisor: "US Unemployment Rate May Approach Great Depression Levels"

Mnuchin "U.S. Economy to Start Rebounding from Q3"

[Image source=AP Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] The U.S. economy is facing its worst situation in the second quarter due to the impact of the novel coronavirus infection (COVID-19), with warnings that the unemployment rate could soar to levels seen during the Great Depression in the 1930s. It is expected that the recovery will begin at least after the third quarter.

On the 27th (local time), Kevin Hassett, Senior Economic Advisor to the White House, warned in an interview with ABC News, "During the 2008 financial crisis, about 8.7 million people became unemployed, but now that number has occurred in just the past 10 days," adding, "We will see an unemployment rate approaching the levels seen during the Great Depression." He further explained, "I believe the second quarter GDP growth rate will record a significant negative figure. Wall Street estimates the second quarter at -20%, and annualized at -30%."

Steve Mnuchin, U.S. Secretary of the Treasury, also forecasted a very difficult situation in the second quarter. In an interview with Fox News on the same day, when the host mentioned that the Congressional Budget Office (CBO) expects the U.S. GDP growth rate to record an annual -5.6% and the unemployment rate to peak at 16% in the third quarter, Mnuchin said, "This is an unprecedented situation. This is not the 2008 financial crisis," expressing concern that "traditional economic model solutions may or may not work."

Secretary Mnuchin emphasized the importance of financial support, stating, "Right now, we are fighting a war, and we must protect American workers and businesses. We will do whatever is necessary for this." He added, "As we begin reopening the economy in May and June, you will see the economy truly recover in July, August, and September," and said, "My expectation is that we will see growth increases during these three months."

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