White House economic adviser Kevin Hassett expects the unemployment rate to climb past 20% due to the economic fallout from the coronavirus pandemic, predicting that May or June will be the high point for job losses.
"Right now, looking across the U.S., there are more than 30 million people that are getting initial claims from unemployment insurance, and that's the biggest negative shock to the jobs market that we've seen since World War II," Hassett, the chairman of the Council of Economic Advisers, told "Face the Nation" Sunday.
"To get unemployment rates like the ones that we're about to see, to get back to your question, which I think will climb up towards 20% by next month, you have to really go back to the Great Depression to see that," Hassett continued. "I think you can expect to see jobs probably trough in May or June."
Hassett said he was "looking for rates north of 20%" before the job market stabilizes.
Payrolls declined by 20.5 million in April, the worst month of job loss in U.S. history, according to the Bureau of Labor Statistics. The unemployment rate climbed to 14.7%, the highest since the Great Depression. Hassett said he expects the unemployment rate to keep rising, as millions of Americans are still filing unemployment claims per week.
However, Hassett expressed optimism about reversing the negative fallout from the pandemic.
"We understand why the economy is slowing down and we expect that we can reverse it," Hassett said. He touted measures like the Paycheck Protection Program (PPP), which was established by the $2 trillion CARES Act appropriated by Congress to provide loans to small businesses.
"We built a bridge to the other side by having these small business loans," Hassett said. However, there have been problems with the rollout of the PPP, and concerns about which businesses are receiving the funding. The program ran out of funds once already, requiring an additional $310 billion appropriated by Congress.
Hassett said he was hopeful that the economy would be able to rebound thanks to the relief funds appropriated by Congress and granted by the Federal Reserve.
"Right now, we have bought some time with all the money we have thrown at the economy," Hassett said.