President Donald Trump’s team of economic advisers no longer fear that Americans will have to endure a slow, painful economic recovery — and are instead predicting a fast bounce back despite unemployment hitting a staggering 15 percent last month.
The Washington Post reports that Trump and his advisers have been “encouraged by the relative strength of the stock market and some indicators like credit card receipts,” and now think that “the U.S. economy will roar back to life in the second half of this year” even though a record-shattering 36 million Americans have filed jobless claims in just the past two months.
“This is playing out pretty much as had been hoped,” adviser Stephen Moore said.
“You’d expect to see a V-shaped recovery,” said White House economist Kevin Hassett. “I’ve been really positively impressed by how quickly things are turning.”
“Unemployment claims look terrible, but they look a lot less terrible,” said adviser Larry Kudlow. “Things are starting to turn — that’s my take.”
However, the Post notes that Federal Reserve chairman Jerome Powell, along with many other economic forecasters, believe that this scenario is entirely too optimistic.
“What matters to people is not GDP rates, seasonally adjusted at an annual growth rate,” said Michael Feroli, chief US economist at JPMorgan. “It is the labor market and unemployment and jobs. And it’s very likely that, by the end of the year, the unemployment rate could still be north of 10 percent.”
And given that Americans tend to hoard cash during times of high unemployment, this could put a severe drag on consumer spending that would prevent a full recovery for the foreseeable future.