U.S. Treasury Secretary Steven Mnuchin said on Wednesday (March 18) that the country won’t see Depression-like unemployment levels, walking back his previously reported comments that joblessness could hit 20 percent unless Congress acts.
"We are [going] to protect American workers," Mnuchin said during an appearance on CNBC.
The Treasury secretary’s latest comments came one day after Mnuchin had warned that the U.S. unemployment rate could rise to 20 percent if Congress doesn’t ratify President Donald Trump’s proposed $1 trillion coronavirus stimulus package.
Mnuchin had reportedly shared his prediction of 20 percent unemployment in a closed-door meeting with Republican senators. He was trying to convince the legislators to pass Trump’s bailout package, which includes sending government checks to Americans experiencing financial difficulty amid the coronavirus outbreak.
But on Wednesday, Mnuchin called his 20 percent estimate a “mathematical statement.” If half of the 40 percent of U.S. workers employed in private industry by firms with 500 or fewer workers lose their positions, that would equal 20 percent joblessness, he said. But he added that “if we follow the president's plan, we will not have it.”
Instead, Mnuchin predicted the economy will come “roaring back once we conquer this disease.” He added that the coronavirus outbreak “isn't like the  financial crisis” in that “there will be an end in sight.”
As for Wall Street’s recent wild swings, Mnuchin said the stock market will both rise and fall. The Dow Jones Industrial Average dropped more than 8 percent shortly after 3 p.m. ET to 19,508.71, down more than 10,000 points from its record 29,551.42 close just weeks ago.
Mnuchin noted that there were many “companies that were great companies a month ago” and will be “great companies six months from now.” He added that the federal government will work with businesses for liquidity if they need it.
The Treasury secretary also noted that there are “a lot of small businesses out there, and the president has also determined … our priority is not just big businesses. … our priority is [also] small businesses, workers.”
That’s why Trump is proposing government cash payments to Americans, Mnuchin said. “He wants to get money into people's pockets quickly, so Americans can feel confident that they know they can stay home … that we can get through this and our great businesses will be better than ever.”