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COVID-19 resulted in ‘biggest negative’ shock to US economy: White House economic advisor

a "biggest negative" shock to the US economy

Washington, May 10 (PTI) The coronavirus pandemic has resulted in a “biggest negative” shock to the US economy that anyone has ever seen in their lifetime, a top White House official said on Sunday, asserting that the Trump administration is gradually turning the situation back to normal.

The coronavirus, which originated in China’s Wuhan city, has claimed over 280,500 lives and infected over four million people in the world so far. The US is the worst-hit country with 1,314,799 confirmed coronavirus cases and over 78,930 deaths.

This is the biggest negative shock to an economy that we have ever seen in our lifetimes. And it hit an economy that in January was about the strongest economy we had ever seen,” White House senior economic advisor Kevin Hassett told CNN.

More than 33 million Americans have lost their jobs in the last two months due to the coronavirus pandemic that has brought the US economy to a standstill. The IMF and the World Bank have projected a negative growth rate for the country.

Several states in the US have now gradually began to relax the restrictions. President Donald Trump has also urged Americans to start resuming normal life.

We basically stopped the greatest economy on Earth to save lives. I think that we’re very glad. We have saved lots of lives. We’re very glad that we have done that. Now we’re gradually turning the economy back on. If you go from a stopped economy to an economy that’s turning back on, then it kind of necessarily needs to be trajecting up,” Hassett said.

Where we are right now in the White House is that we have got a bunch of economies around the country, and really, frankly, around the world starting to turn the lights back on, he said.

We’re watching what happens both to economic activity and, frankly, to the path of disease as that happens, and so that we expect that, very quickly, we will have a picture about how quickly we can recover, whether we might have to slow the recovery back down because the disease is spreading and so on, Hassett added.

Referring to the USD nine trillion COVID-19 stimulus packages announced by the government, he said the money is still in the process of reaching out to the people.

“There’s still a bunch of it that’s going to be delivered over the next month, we think that we have a little moment, the luxury of a moment, to learn about what’s going on, so that the next step that we take can be prudent,” Hassett said.

More than 27 million Americans have applied for unemployment benefits as they have been laid off due to coronavirus pandemic that has resulted in more than 95 per cent of the country’s 330 million population under stay-at-home order.

“The monies we have already passed to the State can be used for first responders. I think that was an important bit of help that the governors were grateful for. And, of course, if we go to a phase four deal, I think that President Trump has signalled that, while he doesn’t want to bail out the states, he’s willing to help cover some of the unexpected COVID expenses that might have come their way,” Hassett said.

I think, right now, the key is to watch the data and to make sure that the next move is as smart as the previous three, he said.

Source: PTI


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