— This is the script of CNBC's news report for China's CCTV on March 27, 2020, Friday.
In an interview with CNBC, U.S. Treasury secretary Steven Mnuchin said he does not think the labor department data was of much significance for future employment trends because the U.S. stimulus package would soon help the job market.
Steven Mnuchin
U.S. Treasury secretary
You know, to be honest with you, I just think these numbers right now are not relevant and you know, whether they're bigger or smaller in the short term. You know, I mean, obviously, there are people who have jobless claims. And again, the good thing about this bill is the president is protecting those people. So, you know, now with these plans, small businesses hopefully will be able to hire back a lot of those people.
But apparently many people don't think so
GREGORY DACO
OXFORD ECONOMICS, CHIEF US ECONOMIST
I think these are dramatic numbers, we are seeing numbers that we've never seen in the past, the increase of jobless claim in the twelve folds the previous week, the increase of from the week prior, and just to give a little bit of context in terms of the 3.3 million jobless claims, that's five times as much as the peak during the great recession
Now, Oxford economics is forecasting 15 million to 20 million U.S. job losses in the coming weeks, with the unemployment rate hitting 10 percent in April. For the unemployment rate, St. Louis Fed President James Bullard said it could reach 30%. Although former federal reserve chairman Ben Bernanke told us this data may not be that great, but it's still going to reach a high level in a short period of time. But some signs saying it is only just the beginning. Following the release of the labor department data, New York's mayor said the first estimate was that at least half a million New Yorkers would lose their jobs during the outbreak.
Much of the $2 trillion stimulus passed by the U.S. senate is directly or indirectly supporting the job market, including financial support for large and small businesses and $250 billion in unemployment benefits.
It is important to note that, despite some criticism before the vote, $600 a week in new unemployment benefits was retained in the current stimulus package, some people think too much benefits may actually increase unemployment.
Beyond the numbers on unemployment claims, there are two issues to watch, one, how's the capacity of states to handle the record number of applications that have clearly exceeded the normal level. There is a view that the current data is likely to be understated; two, how long firms that have not yet laid off workers can hold out?
General motors just announced that it will cut the wages of 69,000 workers by 20 percent, Ford has warned of job cuts in recent days, this issue is highly relied on how broadly and how quickly the stimulus can help.
It is hard to say for sure whether the monetary and fiscal support, which are around $6 trillion, offered by the US government is enough, beyond those two factors, many economists believe, the most fundamental factor in determining how deep the recession will be and how long Americans will lose their jobs remains the epidemic itself.
GREGORY DACO
OXFORD ECONOMICS, CHIEF US ECONOMIST
The real issue is the health crisis. It's the coronavirus crisis and that needs to be addressed by the administration, uh, and by proper measures that are taken in terms of testing ，quarantine people and putting effective lockdown in place across the US. Barring that, the situation is only going to get worse. And you're going to need a lot more stimulus to prevent an even deeper recession in the US economy.
We will keep an eye on this issue.