U.S. Treasury Secretary Steven Mnuchin: Unemployment Rate to Get Worse Before Improving

UTC by Bhushan Akolkar · 3 min read
Photo: International Monetary Fund / Flickr
Photo: International Monetary Fund / Flickr

The U.S. unemployment rate in April 2020 has got worst since the Great Depression at 14.7%. This was a steep jump from the 4.4% rate in March 2020. The Trump administration is looking at ways to reopen the economy and get the engine running.

Ever since the coronavirus pandemic has hit the United States, the unemployment rate in the country is on a steep rise. After nearly a month of lockdown in several parts of the U.S., the Trump administration is mulling options to reopen the economy.

On Sunday, the U.S. Treasury Secretary Steven Mnuchin said that the unemployment rate in the country is close to 25%. Besides, during his interview with Fox News, he further warned that the situation can exacerbate before getting any better. Last Friday, the Labor Department released a report saying that the U.S. lost 20.5 million jobs in April 2020. This jobless rate remains the highest since the Great Depression. Speaking to Fox News host Chris Wallace, Mnuchin said:

“This is no fault of American business, this is no fault of American workers, this is a result of a virus”. Adding an additional warning, he said: “You’re going to have a very, very bad second quarter. The reported numbers are probably going to get worse before they get better. The next year is going to be a great year.”

Currently, the actual unemployment rate considering the people who are not looking for work or remain underemployed stands at 22.8%.

Coronavirus – Major Blow to Economy and Unemployment Rate

With the U.S. having the maximum number of COVID-19 cases, the country’s economy comes to a grinding halt. The situation is so worse that it could possibly make look the 2008 financial crisis better. In April 2020, the unemployment rate in the U.S. jumped to a massive 14.7% from 4.4% in the previous month of March.

“These numbers impact real people. My numbers aren’t rosy, what I said is you’re going to have a very, very bad second quarter,” Mnuchin said. He further added that there can be permanent economic damage if the country doesn’t reopen.

“If we do this carefully, working with the governors, I don’t think there’s a considerable risk,” he said. Matter of fact, I think there’s a considerable risk of not reopening. You’re talking about what would be permanent economic damage to the American public and we’re going to reopen in a very thoughtful way that gets people back to work safely that keeps people social distanced,” said Mnuchin.

Mnuchin also assured that the Trump administration remains committed to helping the public during these testing times. However, he added that they are just not rushing to add another massive relief bill. Mnuchin said that being a bit conservative on spending is not the same as being unwilling to spend.

“What the president and I are now saying is we’ve spent a lot of money, a lot of this money is not even into the economy yet, ” Mnuchin said, adding, “we just want to make sure that before we jump back in and spend another few trillion of taxpayers’ money that we do it carefully.”

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Bhushan Akolkar
Author: Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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