The US economy is recovering from the “act of nature” that COVID-19 shutdowns created, National Economic Council Director Larry Kudlow said, rejecting a more cautious view of the outlook given last week by US Federal Reserve Chairman Jerome Powell.
“There’s a very good chance you are going to get the V-shaped recovery,” Kudlow said on CNN’s State of the Union on Sunday. “The unemployment rate will fall, and 2021 is going to be another solid, solid year.”
Kudlow said the US$600-a-week bonus payments made to some Americans laid off during the COVID-19 pandemic is to end as planned on July 31 to prevent a “disincentive” for workers to return to the jobs market.
Photo: Reuters
The US Congress in March approved the payments as the economy reeled.
Since then, it has been reported that the US officially fell into recession in March, ending a record 128-month expansion.
US President Donald Trump’s chief economic adviser offered bullish forecasts on the economy.
The US is on track for 20 percent growth in the second half of this year and a jobless rate of below 10 percent by year-end, he said on Fox News Channel’s Sunday Morning Futures.
His unemployment forecast was similar to one offered on Sunday by Dallas Federal Reserve Bank President Robert Kaplan — that the jobless rate would end the year at 8 percent or more.
In some cases, the top-up payments plus regular unemployment checks add up to more than workers had earned at their jobs, Kudlow said on CNN, adopting a talking point used by several Republican lawmakers.
“We are on our way, we are reopening and businesses are coming back, and therefore jobs are coming back, and we don’t want to interfere with that process,” he said. “At the margins, incentives do matter.”
Trump is looking at a measure that would be a bonus to return to work, Kudlow said, without offering specifics.
Powell on Wednesday last week gave a mostly downbeat assessment of the economy, after policymakers held interest rates near zero at a two-day meeting.
He suggested there would be a “long road” to full recovery.
Kudlow said the Fed chief’s comments had been “really morose.”
Kudlow defended a Trump administration decision to not disclose details about companies that received billions of dollars in taxpayer funds through a high-profile federal coronavirus-relief initiative.
US Secretary of the Treasury Steven Mnuchin announced the move, which reversed earlier guidance.
“I don’t think it’s necessary” to make the details public, Kudlow said on CNN.
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