White House Economic Adviser Larry Kudlow said in a CNN interview that the $600-a-week funds that Americans receive on top of regular unemployment benefits might end on July 31 as previously planned. However, he said President Donald Trump is mulling a measure that would offer some kind of bonus for returning to work.
The perk wouldn’t be as large as the $600 per week in extra payments, but it would provide an incentive to accept a job, Kudlow told CNN. Laid-off workers currently get the $600 as part of the federal CARES Act of economic stimulus passed pandemic’s wake. However, critics say some people wound up making more on unemployment that they did at their old jobs, creating an incentive not to accept new positions or return to their previous ones.
“We’re paying people not to work,” Kudlow said on CNN. “It’s better than their salaries would get.”
The expert also noted that weekly U.S. jobless claims have been dropping for 10 consecutive weeks. He said U.S. businesses are coming back online, so jobs are returning as a result, and the administration doesn’t want to interfere with that process. (As PYMNTS reported previously, the country’s unemployment rate dropped to 13.3 percent in May.)
While the adviser told CNN that he believes people want to get back to work, welcome the U.S. economy’s reopening and are anxious to leave the house, he added that “at the margin, incentives do matter.”
Beyond improving jobless numbers, he predicted the Commerce Department will release “big, big” U.S. retail sales numbers on Tuesday (June 16). The expert noted in the CNN interview that department store and general merchandise sales are already above year-ago levels.
Kudlow also said in the interview that the Apple Mobility Index is “practically” at pre-pandemic levels, which he said shows that people are traveling again. The economic adviser added that new business applications have jumped, and small businesses are about 80 percent reopened.
“This is all positive news coming off the pandemic,” Kudlow said on CNN. “We are in the recovery stage. … I think there’s a very good chance you are going to get the V-shaped recovery, and I think the second half of the year … will be a good 20 percent economic growth, the unemployment rate will fall and 2021 is going to be another solid, solid year.”
He credited the government’s much-maligned Paycheck Protection Program (PPP) with helping reduce employment losses, noting that the U.S. economy created 3 million jobs in May when analysts had expected it to actually lose millions of positions.
“It’s probably one of the most successful rescue packages in American history,” Kudlow told CNN.
The White House adviser added that he thinks the PPP program has enough transparency even though the government isn’t releasing names of all businesses that got loans. U.S. Treasury Secretary Steven Mnuchin promised to offer aid with “full transparency” in March, but he declined to name aid recipients last week.
Kudlow said to CNN that many firms that shouldn’t have qualified for PPP loans returned the money and “some of those have been named.” But he said even without releasing names of all businesses that got loans, the program has “transparency of the process of making the evaluation for the loan and then the distribution of the loan.”