Larry Kudlow, director of the U.S. National Economic Council, speaks to members of the media at the White House in Washington, D.C., U.S., on Monday, April 6, 2020.
Stefani Reynolds | Bloomberg | Getty Images
National Economic Council Director Larry Kudlow told CNBC on Thursday that there are encouraging economic signs in states that have reopened businesses and that the Trump administration expects a strong rebound.
“We’re seeing the economy gradually, in phases, reopen in May and June. These are the transition months. We’re actually seeing some glimmers of hope amidst all the hardship and heartbreak,” Kudlow said on “The Exchange.”
Earlier on Thursday, the Labor Department reported that there were more than 2 million initial jobless claims last week, bringing the total number of new claims since the coronavirus crisis began to more than 40 million. Continuing jobless claims did decline slightly, however.
Throughout the month of May, states and cities have been lifting economic restrictions that had been used to slow the spread of the virus. Many states have now allowed non-essential businesses to reopen with social-distancing measures.
Kudlow pointed to the high percentage of unemployed workers in April who described their layoff as “temporary” as a reason to expect the economy to recover quickly.
“If that is true, or if that is nearly true, then we may see folks coming back to work faster than we might have thought, let’s say, a month or six weeks ago,” Kudlow said.
He also stressed that the health situation was part of the economic recovery, saying the reopening of states and businesses “has got to be done safely.”
In response to the economic hit from the pandemic, federal leaders passed the CARES Act, which added an additional $600 per week to workers who filed for unemployment and provided support for businesses. The flat $600 addition to unemployment benefits has been criticized by some politicians because it effectively gives some low-wage workers a raise for not working.
Republican Sen. Rob Portman from Ohio has proposed giving cash bonuses to encourage employees to return to work, and Kudlow said the Trump administration was open to that idea.
“It’s something we’re looking at very closely. We may go with something like that,” Kudlow said.