White House’s Summers Discusses U.S. Economic Recovery: Video
According to experts, the unemployment rate will remain high in the coming months
White House economic adviser Larry Kudlow said on Sunday that the US economy is “in a recovery phase” after the devastating impact of the coronavirus pandemic, which has led to the closure of thousands of businesses. However, experts say the high unemployment rate will continue in the coming months..
“I think we are returning to the previous state. 2021 will be a very sustainable year, “Kudlow told CNN.
He made it clear that the $ 600 a week unemployment benefits received from the federal government by more than 40 million people in addition to state unemployment benefits are likely to end in late July as planned..
“We pay people not to work,” he said. “[In some cases] it’s better than their salary.”.
Such support for the unemployed may have made sense in the early stages of business closures due to coronavirus, he said, but not now that the economy is recovering..
At the same time, he said, the Trump administration allows “some kind of return to work bonus” that those laid off will receive, but it will be less than the weekly federal additional unemployment compensation that was paid for two and a half months. Some lawmakers have offered a one-time stipend of $ 1,200 to return to work.
“We want people to get back to work,” said Kudlow. – I think people want to go back to work. We do not want to interfere with this “.
He said unemployment payments from the states would remain. However, they usually represent less than half of what workers receive, and the amount of these payments varies significantly from state to state..
Despite the fact that Kudlow is optimistic about the state of the American economy, he said that the fact that the coronavirus epidemic does not stop and people continue to die is “a matter of concern” as it could become an obstacle to economic recovery..
More than 2 million cases of coronavirus have been registered in the United States, more than 115 thousand people have died. Tens of thousands more are expected to die in the coming months.
“People should be safe, maintain a social distance of at least two meters from other people, and wear masks [in key areas],” Kudlow said..
The official U.S. unemployment rate stood at 13.3 percent in May, although officials say the rate should be 16.4 percent, adjusted for research bias..
The Federal Reserve System (US central bank) predicted on Wednesday that the US unemployment rate would fall to 9.3 percent by the end of the year and to 6.5 percent by the end of 2021. Compared to the expectations of some economists, this is a more rosy forecast..
Fed chief Jerome Powell admits millions of Americans still struggle to find jobs.
“Unemployment remains at a historically high level,” he said at a press conference. – The deterioration of the situation affected the Americans in different ways. The rise in unemployment has been particularly severe for low-paid workers, women, African Americans and Hispanics. “.
At the end of the two-day policy meeting, the Fed said: “The ongoing health crisis in the near term will have a serious impact on economic activity, unemployment and inflation and pose significant risks to the economic situation in the medium term.”.