By Josh Mitchell, Andrew Restuccia and Gordon Lubold
WASHINGTON -- Record-setting jobless claims and dire economic
forecasts are giving fresh urgency to the debate within the Trump
administration and across the country over how rapidly
coronavirus-fueled restrictions should be pared back so the economy
can begin its revival.
President Trump has expressed eagerness to move quickly, and
Treasury Secretary Steven Mnuchin said on CNBC Thursday that he
thought the U.S. economy could be ready to reopen by the end of
May, "as soon as the president feels comfortable with the medical
issues."
Federal Reserve Chairman Jerome Powell also nodded to growing
debate. "I do think it's time to have a serious public conversation
and a lot of analysis about that," he said Thursday in an interview
webcast by the Brookings Institution. "We need to have a plan
nationally for reopening the economy. We all want it to happen as
quickly as possible."
As for when it would be safe for businesses to reopen and for
people to go back to work, Mr. Powell said "most people expect that
to happen in the second half of this year, after the second
quarter, which of course ends on June 30." He declined to be more
specific.
Within the administration, the debate has frequently pitted
public-health officials, who have urged caution on lifting
restrictions, and economic officials who want to move on a faster
timetable. The latter group could gain a new platform, as the White
House weighed the creation of a new economy-focused coronavirus
task force, in addition to the existing task force led by Vice
President Mike Pence, according to administration officials.
The new task force would consist of the president's top economic
advisers, including Mr. Mnuchin, National Economic Council Director
Larry Kudlow and Kevin Hassett, former chairman of the Council of
Economic Advisers. Mr. Hassett has returned to the White House to
advise the president. Aides also said Ivanka Trump, the president's
daughter and senior adviser, would also likely be a member of the
task force.
Administration officials have started contacting outside
economic experts and other allies of the president to gauge their
interest in working with the task force, a person familiar with the
matter said.
Some administration officials downplayed the likelihood that the
second task force would be formed. If it is, they added, it would
be one of a handful of working groups focused on specific issues
pertaining to the outbreak. Mr. Kudlow told reporters Thursday
afternoon that the president is seeking guidance about reopening
the economy from people inside and outside the government. "There's
no formal structure," he said.
If formed, the task force would focus on efforts to boost the
ailing economy and discuss options for the eventual relaxation of
social-distancing guidelines -- though state and local leaders are
actually in charge of implementing and lifting such restrictions --
officials said, though they noted the details are still in
flux.
"No one wants to reopen America more than Donald Trump, but the
president has told us we need to do it responsibly," Mr. Pence told
reporters at a White House news conference on Thursday.
Mr. Trump said at the news conference he would like to see as
many as 750,000 Covid-19 tests available in the U.S. per week
before reopening the economy.
The president initially set a goal of reopening the country by
Easter, but later abandoned that deadline, extending the
administration's social-distancing guidelines until the end of
April. Though he has said he would defer to the advice of the
administration's health advisers, there is concern among some
outside experts that the president could abandon social-distancing
rules too soon and spur a resurgence of the virus.
Dr. Anthony Fauci, head of the National Institute of Allergy and
Infectious Diseases, told CBS News Thursday that he could envision
a return to public gatherings and celebrations this summer "if we
do the things that we need to do to prevent the resurgence" of the
virus.
Administration officials have been buoyed by modeling showing
the mitigation measures are working in certain parts of the
country, including New York.
"What we are doing is working," Dr. Fauci told reporters
Thursday.
The new economic task force could initially be "decoupled" from
the existing coronavirus task force so as to keep the two efforts
on separate but parallel tracks for now, said one senior
administration official. Officials concluded that combining the two
endeavors at this juncture would be premature, since the health
crisis is ongoing.
Mr. Trump and his advisers have renewed discussion about
reopening the country in phases, in recognition that some parts of
the country so far have been spared the worst of it. But that
discussion will be led by the assessments and recommendations of
task force doctors, the official said.
"I think you could see a scenario where you could have certain
locations, cities and counties, up and running before others," the
official said Thursday.
Any such effort will be guided by a sense of caution, at least
for now. "There's a serious and real concern about doing it too
soon," the official said. "We will be conservative on the front
end."
One study -- from Moody's Analytics for The Wall Street Journal
-- showed that more than a quarter of the economy has been shut
down since early March, a staggering decline that has never
happened so sharply, so swiftly, economists say.
The economic and human toll of the business closures has become
more apparent in recent days. On Thursday, the Labor Department
reported that another 6.6 million Americans submitted initial
applications for jobless benefits last week, bringing to nearly 17
million the number of new applicants since the virus outbreak
began.
The private research firm Oxford Economics said in a note to
clients Thursday it expects job losses to reach 24 million in
April. Some industries -- including food services, retail and
transportation -- could lose up to half of their workforce, the
firm said.
Economists polled by The Wall Street Journal expect the
unemployment rate to soar to 13% in June, which would be the
highest in the post-World War II era. The jobless rate, which stood
at 4.4% in March, hit 10% in October 2009, shortly after the last
recession. Economists in the Journal poll expect it to fall in the
second half and settle at 10% by the end of this year.
Meanwhile, the University of Michigan said its closely watched
index of consumer sentiment fell sharply to an eight-year low.
Such dire reports -- along with the prospect that many
businesses could collapse despite the $2 trillion economic rescue
package recently passed by Congress -- are adding pressure on
federal, state and local leaders to draft plans to reopen their
economies.
For his part, Mr. Powell said the decision to reopen hinges
largely on the insights of health officials. He pointed to a key
risk: that workers return to the workplace too soon, leading to a
second wave of virus infections that would reverse the gains from
social-distancing measures. "We all want to avoid a false start"
that would require the country going back to "square one," he
said.
"This is not a judgment that is assigned to the Fed to make,"
Mr. Powell said. "That's a judgment that has to be made, I think,
starting with health officials."
The decision on whether to ease economic restrictions and lift
shelter-in-place orders rests largely with states and local
leaders. Through early this week nearly every state had ordered
residents to stay inside and businesses to shut down.
Mr. Powell said Thursday he believes that whenever businesses do
reopen, the economy will rebound.
"There is every reason to believe that the economic rebound when
it comes can be robust," he said. "We entered this turbulent period
on a strong economic footing and that should help support the
recovery."
Write to Josh Mitchell at joshua.mitchell@wsj.com, Andrew
Restuccia at Andrew.Restuccia@wsj.com and Gordon Lubold at
Gordon.Lubold@wsj.com
(END) Dow Jones Newswires
April 09, 2020 20:28 ET (00:28 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.