As the coronavirus pandemic continues with no concrete end in sight, Americans are being warned to expect a level of unemployment reminiscent of the Great Depression this summer. Kevin Hassett, senior economic adviser to President Donald Trump, warned Tuesday that the U.S. unemployment rate could skyrocket to between 16 and 20 percent by June, as per CNN.
With the current level of unemployment at 4.4 percent, that would be a significant spike unlike anything the country had seen since the 1930s, when the joblessness rate peaked at 25 percent in 1933, according to estimates from the U.S. Bureau of Labor Statistics. Hassett warned CNN that the economic numbers between May and July "will be as bad as anything we've ever seen."
Hassett said things will get worst during the second quarter of the economic year, estimating the U.S. GDP could collapse by an unprecedented annual rate of 40 percent, as in line with several Wall Street investment bank estimates. "I'm not saying we're going to have a Great Depression, but I am saying prepare yourself," Hassett said. "GDP tomorrow will probably be a negative number and that will be the tip of the iceberg of a few months of negative news that's unlike anything you've ever seen."
This comes in juxtaposition with what Treasury Secretary Steven Mnuchin has said about his predictions for the economy, telling reporters Sunday that the country's economy would be rebounding by summer as states slowly allow businesses to open back up. "What I do think is, as we open up the economy in May and June, you will begin to see the economy bounce back in July, August, September," Mnuchin said. "And my expectation is that you'll see an increasing rate of growth in those three months."
Since mass closures of public areas and businesses were implemented to slow the spread of COVID-19 in the last weeks, more than 30.3 million people have filed for joblessness aid, according to the Bureau of Labor Statistics, with the economy losing more than 700,000 jobs in just one month — adding up to be one in six American workers. That number could be even more damning than initial statistics let on, with a survey by the Economic Policy Institute finding that around 12 million more people have lost jobs but haven't filed a claim because couldn't get through their state's overwhelmed system or they didn't try.