President Donald Trump’s economic adviser Kevin Hassett is predicting that the Gross Domestic Product (GDP) for the second quarter will be the worst drop the U.S. has seen in a long time.
“Right now, if you take what happened at the end of the first quarter … then you’re looking like it’s pretty likely you get a negative number,” Hassett said during an interview on CNBC on Monday.
He continued, “And then for second-quarter GDP, it’s going to be the biggest negative number that we’ve seen since the Great Depression.”
Hassett estimated that the GDP for the second quarter would be around “minus 20 to minus 30 percent.”
Watch the interview below:
The U.S. economy could contract 20%-30 in Q2, White House senior economic advisor Kevin Hassett says. “For second-quarter GDP, it’s going to be the biggest negative number that we’ve seen since the Great Depression.” https://t.co/xMTKVQTLvr pic.twitter.com/I6ivluQNoe— CNBC (@CNBC) April 27, 2020
GDP is a measure of the value of goods and services produced in the country and an indicator of how healthy a country’s economy is. During the Great Recession between December 2007 to June 2009, which was the worst economic downturn since the Great Depression, GDP dropped 4.3%.
Meanwhile, the unemployment rate during the recession rose to 10%.
Hassett predicts that the unemployment rate in the first week of May will be between 16% and 17%.
“The question is, what happens next and that’s what we’re focused on at the White House,” he said.
Hassett’s comments come as some states are preparing to reopen their economies. However, members of the White House coronavirus task force have warned that the process of lifting restrictions on businesses and public life will have to be done carefully.
Former Food and Drug Administration Commissioner Scott Gottlieb predicts that parts of the country may be able to start reopening in mid-May or late-May, as IJR previously reported.
However, Dr. Deborah Birx predicts that social distancing guidelines will likely stay in place through the summer.