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Hassett warned that another stimulus package will likely be necessary as the U.S. economy attempts to stay afloat during Great Depression-like unemployment rates. The U.S. unemployment rate rose by 10.3 percentage points in April to 14.7% — 11.1 points higher than in April 2019. More than 38 million people have filed jobless claims since the COVID-19 shutdown. Three states have unemployment rates over 20%: Hawaii, Michigan, and Nevada, which is at 28.2%.
Hassett is concerned that national unemployment could balloon to over 20% in May and June. Hassett said that unemployment might increase to 22% to 23% by the end of May and could edge up a bit in June before dropping off.
“June will be higher,” he said on Friday. “That will be the turning point.”
“Of course you could still not be back to full employment by September or October,” Hassett added. “If there were a vaccine in July, then I’d be way more optimistic about it.” Hassett cautioned that there was a possibility of double-digit unemployment in November.
“We are getting back to normal, but there for sure — if you saw the initial claims, there’s still a lot of pain out there,” Hassett told CNN. “You’re looking at about 40 million unemployed folks, so, yeah, I think that there’s definitely cause for doing something else.”
Treasury Secretary Steven Mnuchin also believes that American people and businesses will need another injection of financial support as the coronavirus lockdown winds down.
“I think there is a strong likelihood we will need another bill,” Mnunchin said on Thursday. “We’re going to step back for a few weeks and think very carefully if we need to spend more money and how we’re going to do that,”
President Donald Trump agreed with Mnunchin on the need for a second stimulus package.
“I think we will. I think we’re going to be helping people out,” Trump said on Thursday. “We’re going to be getting some money for them during the artificial — because it really is, it’s an artificial closure. And now we’re going to be able to open it up.”