White House official warns of negative shocks before rebound later in 2020
Top Trump adminstration officials on Tuesday predicted a strong economic rebound in the fourth quarter as the coronavirus fades, but a
senior White House adviser warned that near-term unemployment and GDP data will be a “very grave” negative shock.
Kevin Hassett, senior economic adviser to President Donald Trump told CNN that unemployment could reach 16-20%, and GDP output could fall as
much as 30-40% on annualized basis in the second quarter, a prediction in line with Wall Street and Congressional Budget Office forecasts.
“I’m just saying that we’re going to have the biggest shock since the Great Depression,” Hassett told reporters at the White House. “It’s a very
grave shock and something we need to take seriously.”
He added that the first quarter GDP growth number being released on Wednesday would likely be negative, telling CNN that this “will be just
the very tip of the iceberg of a few months of negative news that’s unlike anything you’ve ever seen.”
Earlier, U.S. Treasury Secretary Steven Mnuchin predicted that the economy could rebound by late summer as states allow the reopening of
businesses that have been closed to slow the spread of the coronavirus.
“As states start opening up, I think you’re going to see a lot of demand come back,” Mnuchin told Fox Business Network. “Now again, the states
are going to open up slowly, so you’re going to see June and July pick up, but I think by August and September, you’re going to see a big bounce
back from what has been a very rocky period.”