According to data released by the Department of Commerce, the United States economy shrunk 4.8 percent in the first quarter of 2020 as the coronavirus pandemic forced millions of Americans out of work.
The decline is the first quarter of negative GDP growth for the U.S. since the same period in 2014 and was driven by shutdowns, business closures, and layoffs.
Earlier this week, Kevin Hassett, a senior economic adviser to President Donald Trump, warned the economy could contract as much as 30 percent in the second quarter of 2020.
“You’re looking at something like minus 20 percent to minus 30 percent in the second quarter,” he said.
“The puzzle is incomes are staying relatively high and output is going to zero,” Hassett continued. “If the virus does start to go away in a way that makes it so that most every state feels comfortable that it’s safe to open up, then we really could be looking at a rapid recovery because the incomes are still there.”
You can watch footage of Hassett’s remarks below.
“If the virus does start to go away in a way that makes it so most every state feels comfortable that it’s safe to open up, we really could be looking at a pretty rapid recovery because the incomes are still there," says White House advisor Kevin Hassett. pic.twitter.com/IVNYZ9i0VR
— Squawk Box (@SquawkCNBC) April 27, 2020
“I’m not saying we’re going to have a Great Depression, but I am saying prepare yourself,” Hassett said in a separate interview. “GDP tomorrow will probably be a negative number and that will be the tip of the iceberg of a few months of negative news that’s unlike anything you’ve ever seen.”
More than 26 million American workers had filed for unemployment since social distancing went into effect.
Alan is a writer, editor, and news junkie based in New York.