- Two of President Donald Trump’s top economic advisers – Larry Kudlow and Treasury Secretary Steven Mnuchin – said in interviews Sunday that they still saw signs of a “V-shaped” economic recovery even with coronavirus cases climbing.
- “I still think a V-shaped recovery is in place,” Kudlow said in an interview with CNN.
- In an interview with Fox News, Mnuchin also said he expected to see a rebound in the third quarter of 2020.
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Two of President Donald Trump’s top economic advisers on Sunday said they still expected the US economy to rebound swiftly from its recession despite a recent surge in coronavirus cases that has hit the labour market, shaken consumer confidence, and led states to pause or roll back reopening plans.
“I don’t deny that some of these hot-spot states are going to moderate that recovery, but on the whole the picture is very positive,” the White House economic adviser Larry Kudlow said on CNN’s “State of the Union” on Sunday. “I still think a V-shaped recovery is in place.”
Kudlow also said he still expected 20% growth in the third and fourth quarters. He pointed to recent economic indicators suggesting a strong recovery was underway – sales of existing homes jumped a record 21% in June, and retail sales jumped 7.5% after a record spike in May.
In addition, Kudlow sees signs of strength in the labour market despite Thursday’s announcement that the weekly number of people filing new unemployment claims had increased for the first time since March. Continuing claims, which represent the total number of people receiving unemployment insurance, decreased, suggesting others were returning to work.
“I do think the odds favour a big increase in jobs creation and a big reduction in unemployment” in July, Kudlow said, referring to the government nonfarm payrolls report due August 7.
Still, there are risks – some states have had to walk back reopening plans to deal with new outbreaks. Some data indicates the US recovery is losing steam as the virus spreads, and US consumer sentiment slumped last week, erasing all recent gains.
Treasury Secretary Steven Mnuchin also cheered the economic recovery on Sunday, however, also saying the GOP planned to introduce a coronavirus relief bill Monday.
“We do think you’re going to see a very big rebound,” in the third quarter, Mnuchin told Fox News, citing an estimate for 17% US gross-domestic-product growth. “We always said the second quarter was going to be a very bad quarter. That’s not for economic reasons – that’s for health reasons.”
Mnuchin also pointed to June retail sales, which were higher on the year, as a sign that all the money put into the economy had worked. Still, he argued against simply extending the additional $US600 weekly unemployment benefit, which expires over the weekend.
“It just wouldn’t be fair to use taxpayer dollars to pay more people to sit home than they would get working,” Mnuchin said. The Republican plan has pushed to replace 70% of people’s wages through unemployment, which would most likely amount to much less than $US600 a week.
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