KEY POINTS

  • Treasury secretary Steve Mnuchin warns the unemployment will "get worse before they get better"
  • White House economic advisor Kevin Hassett also warned in April unemployment could hit levels not seen since the Great Depression
  • "You're going to have a very, very bad second quarter," said Mnuchin

Treasury secretary Steve Mnuchin now asserts the worst job losses being inflicted by the raging COVID-19 pandemic has yet to come and foresees a "very, very bad second quarter."

Mnuchin has previously claimed the battered U.S. economy will bounce back by summer from the COVID-19 pandemic in a strong V-shaped recovery marked by a surge in consumer spending. Mnuchin's surprising change of mind also confirms statements made April 26 by White House economic advisor Kevin Hassett, who warned unemployment could hit levels not seen since the Great Depression.

Talking on Fox News Sunday, Mnuchin affirmed "the reported numbers (of unemployed) are probably going to get worse before they get better." Mnuchin also admitted to host Chris Wallace the true unemployment rate in the U.S. might be close to 25%.

"You're going to have a very, very bad second quarter," said Mnuchin.

His remarks followed Friday's report from the Department of Labor Department showing the U.S. lost an unprecedented 20.5 million jobs in April. This mind-numbing jobless rate of 14.7% was unquestionably the highest level in one month since the Great Depression. On the other hand, economists say the true unemployment numbers are even more distressing since the labor department figures don't include the millions of workers that have stopped searching for jobs or those considered "underemployed."

Speaking to Wallace on April 26, Mnuchin said he expected the economy to bounce back by the summer.

“I think as we begin to reopen the economy in May and June you’re going to see the economy really bounce back in July, August, September. [...] You’re seeing trillions of dollars that’s making its way into the economy and I think this is going to have a significant impact,” he said.

Despite the unprecedented growth in unemployment, Mnuchin still sounded the eternal optimist Sunday, predicting the economy will reopen in the third quarter and "bounce back" over the summer despite health experts increasing their death estimates from COVID-19. The infection and death rates in the U.S. also continue to soar.

He said the economy would "have a better third quarter," followed by "a better fourth quarter, and next year is going to be a great year."

There were 1.37 million confirmed cases in the U.S. (up 19,770 from Saturday) and 80,773 deaths (up 736), as of 7:58 p.m. ET Sunday, Worldometer data revealed. On Saturday at the same time, the toll stood at 1.35 million cases (up 25,524) and 80,037 (up 1,422).

Speaking to ABC’s “This Week" on April 26, Hassett said COVID-19 is “the biggest negative shock that our economy I think has ever seen.”

“We see an unemployment rate that approaches rates we saw during the Great Depression,” he pointed out. “During the Great Recession we lost 8.7 million jobs in the whole thing. Now we’re losing that many every 10 days, so the lift for economic policy makers is an extraordinary one.”

The White House economic advisor said a V-shaped recovery will depend on the next economic response to the pandemic by the Trump administration.

“A lot will depend on what happens next,” said Hassett about the possibility of V-shaped economic rebound. “What we’ve done with the previous legislation is built a bridge hopefully to the other side of the disease, but then we have to make sure we have what it takes to prosper.”