The US Treasury Secretary Steven Mnuchin has warned that the unemployment rate may get far worse before the coronavirus crisis is over. He warned that the unemployment rate might reach 25% in the coming time, the numbers not seen since the great depression of the 1920s. Earlier, US President Donald Trump said that he was not surprised by the increase in the unemployment rate and stated that the lost jobs would be back as soon as the economy rebounds in this quarter.
“There might be permanent damage to the economy.”
The unemployment rate in the United States already stands at 22.8%. The US economy lost over 20.5 million jobs in the month of April. In an interview with Fox News, Treasury Secretary Steven Mnuchin said that the loss in jobs is no fault of an American business or American workers, this is a result of a virus. He also noted that the reported numbers are probably going to get worse before they get any better. In just one month, the coronavirus pandemic has erased all job gains since the Great Recession in the United States. According to Steven Mnuchin, there might be some permanent damage to the US economy because of the pandemic.
S&P 500 is expected to fall in the short term.
The chief investment officer of the Leuthold Group, Doug Ramsey, has predicted that the S&P 500 index could undergo a 32% correction in the short term. Doug Ramsey noted that all the sector that signals to an economic revival are not behind the latest gains. The statistical difference put the benchmark S&P 500 under the risks of deeper downside moves. And it is equally bad for the leading cryptocurrency, a non-correlated asset that has been tailing the US equities moves during the pandemic. So far, there have been 1.3 million positive COVID 19 cases in the US, and over 80,000 people have lost their lives.