Former Treasury Secretary Jack Lew said Thursday that the economy would not bounce back strongly as businesses reopened, saying that some sectors would hold the overall economy back and lead to a more sluggish recovery.
"I think the best we're going to be able to do is getting part way back to where we were. I don't see people filling sports arenas or airplanes or crowding into restaurants anytime soon," Lew said on CNBC's "Closing Bell." "So we know that there are going to be parts of the economy that are slow to recover even if we come out of this well ... I think the best we're going to do is a slow recovery."
Lew cited forecasts from the Congressional Budget Office that show unemployment averaging 10% during 2021 as an example of how slow the recovery might be and said Congress should consider keeping economic relief programs in place until unemployment is back down near 5.5% or 6%.
More than 3 million Americans filed unemployment claims last week, according to the Labor Department, bringing the total over the past seven weeks to 33.5 million. Economists surveyed by Dow Jones expect the monthly unemployment rate slated to be release Friday morning to come in at 16%.
"We are facing a long-haul, and I hope that as Congress responds in this next round of legislation, they put measures in place that provide critical relief like extended unemployment benefits that go until the economy recovers, not just to a date certain, which is way too short," Lew said.
The former Obama administration official said that government leaders were too slow initially in reacting to the virus, but that the speed that Congress and current Treasury Sec. Steve Mnuchin eventually showed on crafting economic relief packages was "admirable."
However, Lew said that some of the programs, such as the Paycheck Protection Program, still have issues. The program has been criticized for originally allowing large, publicly traded companies to access the program, and some of the banks administering the loans have been accused of favoring larger companies over smaller ones.
"I think in the execution, we still need clarification on things like PPP. It was not a secret that small Main Street businesses did not have banking relationships that would get them to the front of the line. There needed to be guidance to get them to the front of the line. I hope that's being fixed now," Lew said.