Kevin Hassett: Unemployment will be highest in June

New York (CNN Business)Unemployment rates in 43 states set record highs last month as the coronavirus pandemic forced nonessential businesses to close across the nation, according to federal data released Friday.

Rates rose in every state and the District of Columbia, compared to March, according to the Bureau of Labor Statistics. Similarly, the national unemployment rate soared to 14.7% last month, compared to 4.4% in March and a near 50-year low of 3.5% in February, before the outbreak hit the United States.
Nevada, which was slammed by the shuttering of its extensive casino and tourism industries, had the nation’s highest unemployment rate. It skyrocketed to 28.2% last month, up from 6.9% in March and 3.6% in February.

    “Nevada is facing record high unemployment and the sheet numbers are difficult to comprehend,” said Gov. Steve Sisolak, who allowed certain businesses to reopen earlier this month but kept casinos closed for now.
    Michigan and Hawaii had the next highest unemployment rates, at 22.7% and 22.3%, respectively.

    Data collection problems

    The state report, however, was marred by data collection and misclassification issues that affected all states to some degree, the agency said. The response rate was lower than usual because the Census Bureau did not conduct in-person interviews in April, and two call centers were closed because of the pandemic.

      Also, a Bureau of Labor Statistics analysis suggests that several million of the 11.5 million people listed as employed, but not at work, should have been considered “unemployed on temporary layoff,” which would have increased the national unemployment rate and those for the states.
      The problem prompted Connecticut, which was listed as having the lowest unemployment rate at 7.9%, to include a prominent note in its press release that said the federal data must be considered “inaccurate” and “severely underestimated.” Instead, the state estimates its true unemployment rate to be around 17.5%.
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      Kevin Hassett predicts coronavirus job losses will peak in June

      Trump to unveil new coronavirus stimulus plan ‘shortly’: White House economic adviser

      White House economic adviser Kevin Hassett discusses his outlook for the economy amid the coronavirus pandemic.

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      White House adviser Kevin Hassett on Friday predicted June could mark a turning point for the nation's unemployment rate after another brutal jobs report in May.

      "We're going to get another bad May number that'll probably be an unemployment rate in the 20 percent range, maybe a little more," Hassett told FOX Business' Stuart Varney. "I expect that June will be the trough, and then we'll start heading back up."


      Unemployment in the U.S. is already at the highest level since the Great Depression, a remarkable sign of the damage caused by the coronavirus pandemic, but economists have warned the full impact of the crisis on the labor market might not be seen until later this year.

      "As the people sort of roll back in, I think to get jobs moving in the right direction, it's just going to take a little bit longer," Hassett said.


      In April, the Labor Department provided one of the first comprehensive looks at the economic impact of the virus outbreak and subsequent stay-at-home measures adopted by states to slow its spread. Employers cut 20.5 million jobs in the one-month period, according to the data, pushing the unemployment rate to 14.7 percent.

      But economists say it’s likely the April jobs report, which relied on surveys conducted in the early weeks of the month, did not show the full extent of the labor market's destruction at the hands of the virus outbreak.


      Since the nation's economy came to a near standstill in mid-March, 38.6 million Americans have filed for first-time unemployment benefits, meaning the jobless rate will likely increase in May, even as some states begin to ease stay-at-home guidelines.

      The government collected its data for the May jobs report in the beginning of the month including May 12.

      A recent study from the Federal Reserve Bank of Cleveland estimated the unemployment rate will reach its max in May before gradually declining, ending the year at roughly 7.5 percent.


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      Kevin Hassett warns unemployment could hit 20% by June

      New York (CNN Business)The White House is telling Americans to brace for a period of Great Depression-level unemployment this summer.

      Kevin Hassett, a senior economic adviser to President Donald Trump, warned Tuesday that the jobless rate in the United States could spike to between 16% and 20% by June.
      That would be a startling spike from current levels of 4.4% and would mark the highest unemployment since the 1930s. (Unemployment spiked at 25% in 1933, according to estimates from the US Bureau of Labor Statistics.)

        America is facing its first economic downturn since 2014
        The economic numbers between May and July “will be as bad as anything we’ve ever seen,” Hassett told CNN’s Poppy Harlow.
        Beginning in March, the coronavirus pandemic crushed wide swaths of the American economy. Restaurants, movie theaters, theme parks and sports arenas have shut down completely. And it remains unclear if consumers will return to those crowded places even if social distancing restrictions are relaxed.

        The health crisis has led to a sudden surge of unemployment. American workers have already filed more than 25 million initial jobless claims since March 14. The economy lost more than 700,000 jobs in March, lifting the unemployment rate from a 50-year low of 3.5%.

        40% drop in GDP?

        Economists estimate GDP contracted during the first quarter by an annualized rate of 4%. If confirmed by the government on Wednesday, that would mark the worst quarter for the US economy since the Great Recession. It would also be the first outright contraction since 2014.
        The biggest pain will be felt during the second quarter. Hassett, who served as a CNN commentator, said US GDP could collapse that quarter by an unprecedented annual rate of 40%. That matches some predictions from Wall Street investment banks.
        “I’m not saying we’re going to have a Great Depression, but I am saying prepare yourself,” Hassett said. “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.”
        Other Trump administration officials have painted a more positive outlook.
        Treasury Secretary Steven Mnuchin told reporters on Sunday that the US economy will rebound this summer.
        “What I do think is, as we open up the economy in May and June, you will begin to see the economy bounce back in July, August, September,” Mnuchin said. “And my expectation is that you’ll see an increasing rate of growth in those three months.”

        How fast will the economy recover?

        Wall Street is betting on a rapid recovery, despite the risks that lie ahead.
        The S&P 500 has spiked 29% since the low on March 23, a stunning rebound that reflects optimism about the pandemic and relief over the aggressive response from the Federal Reserve, Congress and the White House. The US economy is experiencing its greatest shock since the Great Depression, and yet the S&P 500 is down just 11% on the year.
        Market rally continues as oil plummets: April 28, 2020
        Investors are also relieved that some US states including Texas and Georgia have begun to slowly reopen their economies, albeit with health restrictions and social distancing still in place.
        The Congressional Budget Office projects a strong rebound in the US economy during the second half of the year. The nonpartisan group estimates that GDP will surge by 23.5% during the third quarter and 10.5% during the final three months of the year.
        “It’s quite plausible we see a turnaround like the CBO projects. But I’m still worried,” Hassett said.

        Risk of second wave

        The CBO forecast is based on the assumption that social distancing requirements are drastically reduced during the second half of the year as the pandemic fades.
        The risk is that a second wave of infections forces stay-at-home orders to snap back on, derailing the economic recovery.

          Moody’s Investors Service warned Tuesday that renewed lockdowns would deal “severe harm” to the economy and could “quickly escalate into a deep financial crisis that would be far worse in scale and scope” than the 2008 financial crisis.
          “If there’s another wave in September,” Hassett said, “the economy is going to take another hit, for sure.”
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          Kevin Durant’s former California home for sale at $6M

          Real estate after coronavirus will ‘bounce back very quickly’: NAHB CEO

          NAHB CEO Jerry Howard discusses how the coronavirus is impacting the real estate market.

          A luxurious Oakland, Calif., home where NBA star Kevin Durant once lived is available for $5.99 million.

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          Durant, who was sitting out his first season in Brooklyn due to an Achilles injury even before the coronavirus pandemic forced the league to halt games, rented the home during his time on the Golden State Warriors.

          ​ Kevin Durant once lived in this California home. Now it can be yours. (Credit: Christian Klugmann)


          The 9,084-square-foot home includes seven bedrooms and seven bathrooms, according to the off-market listing with Andrea Gordon of Compass.

          The hilltop property features expansive views of Oakland and the San Francisco Bay, and the home takes advantage of the scenic overlook with large windows and outdoor space on every level.

          Image 1 of 5

          Kevin Durant once lived in this California home. Now it can be yours. (Credit: Christian Klugmann)


          The “commanding” entryway includes a portico with a water feature next to the three-car garage, according to Gordon. The property is also gated and features a circular driveway.

          Image 1 of 3

          Kevin Durant once lived in this California home. Now it can be yours. (Credit: Christian Klugmann)


          The modern interior includes a “dramatic” spiral staircase connecting all levels of the home, according to Gordon. The open family room and kitchen feature high ceilings and floor-to-ceiling windows.

          Image 1 of 5

          Kevin Durant once lived in this California home. Now it can be yours. (Credit: Christian Klugmann)


          There are four master suites, each with outdoor access, as well as two distinct apartments, one studio and one two-bedroom, two-bathroom unit.

          Image 1 of 4

          Kevin Durant once lived in this California home. Now it can be yours. (Credit: Christian Klugmann)

          The home also includes amenities like a media room and a private basketball court.


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