US economy recovering from coronavirus lockdowns 'very rapidly': Art Laffer
'Economics is working beautifully'
Art Laffer, a former economic adviser to President Ronald Reagan, said Thursday that the country is “bouncing out” of the economic pain caused by the coronavirus pandemic “very rapidly.”
Laffer made the comment on Fox News’ “America’s Newsroom” as The Dow Jones Industrial Average trimmed its losses, reaching above 26,000 once again and as the Labor Department announced that initial jobless claims in the week ending June 13 totaled 1.51 million, raising the total number of job losses to about 46 million since stay-at-home orders were issued in mid-March.
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Economists surveyed by Refinitiv were expecting 1.3 million claims, but the actual numbers represent just a slight drop from last week's revised total of 1.56 million.
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Laffer cited a shocking Labor Department report released earlier this month, which showed that the U.S. unemployment rate unexpectedly dropped from a record high in April to 13.3 percent in May, signaling that the economy is recuperating at a faster pace than expected from the coronavirus lockdown.
In the report, the Labor Department said that employers added a record 2.5 million jobs in May. In April and March alone, the U.S. economy lost a combined 22.1 million jobs, leaving 21 million Americans without work.
“We got 2.5 million jobs [that were] added instead of lost last month, new initial claims are down, continuing claims are down,” Laffer said on Thursday, adding that retail is also “bouncing.”
“It’s wonderful,” Laffer added.
U.S. retail sales surged 17.7% in May -- the biggest monthly increase ever, as 2.5 million Americans went back to work, the Commerce Department reported Tuesday.
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“Economics is working beautifully and this administration has done a great job and I expect with the payroll tax waiver, we’ll get a real jump-start and get right back to normal very quickly,” Laffer said, referencing the payroll tax cut for employees President Trump is hoping to include as part of a Phase 4 stimulus relief package.
Laffer has been a strong proponent of a payroll tax cut for employees.
He made the statements on Thursday immediately following an interview with White House trade adviser Peter Navarro on “America’s Newsroom,” who also discussed the fourth stimulus relief package.
“The first three phases of stimulus, it’s been tactical, and appropriately so, helping the working people of America in a very difficult situation get back on their feet along with businesses, particularly small businesses,” Navarro noted.
“But, we know now that there are significant structural headwinds, sectors like entertainment, transportation, hospitality, all are being disproportionately affected.”
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Navarro went on to say that in order to have jobs in strong economy, it’s necessary to “be strategic” in bringing manufacturing jobs back to the U.S. and create a “solid” base to “employ service sector refugees who might lose their jobs in these beleaguered sectors.”
“If we don’t do that in phase four, if we don’t seize the strategic opportunity, then we’re going to miss a big opportunity,” Navarro stressed.
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FOX Business’ Jonathan Garber and Megan Henney contributed to this report.