Fox News Anchor Questions Mnuchin Whether Trump Administration Predictions Are 'Based on Economic Reality or the November Election?'

Fox News anchor Chris Wallace pushed back against "rosy predictions" about the economy made by President Donald Trump's Treasury Secretary Steve Mnuchin in a Sunday interview, questioning the cabinet official over whether his analysis was "based on economic reality or the November election?"

Mnuchin, who has spearheaded the administration's negotiations with Congress over economic stimulus legislation, appeared for an interview on Wallace's weekly show Fox News Sunday. During the segment, the Cabinet official highlighted the high number of job losses since mid-March, but also optimistically projected that the economy would recover swiftly in the second half of the year.

"The reported numbers are probably going to get worse before they get better, but that's why we're focused on rebuilding this economy," Mnuchin said.

"We'll have a better third quarter, we'll have a better fourth quarter, and next year is gonna be a great year," the Trump administration official added.

But Wallace confronted Mnuchin over the optimistic projection for the end of 2020 and next year. The anchor highlighted statistics that suggested the economic problems would continue through 2021.

Chris Wallace and Steve Mnuchin
Fox News Sunday anchor Chris Wallace interviews Treasury Secretary Steve Mnuchin about the economic fallout of the novel coronavirus pandemic on May 10 Fox News/screengrab

"You and the president both say the economy is going to come roaring back ... I want to ask about a number of signs which indicate that the recovery is going to be much slower than that, sir. Job losses are not just in the hospitality industry, airlines, restaurants, as you would expect — but they're more widespread. The white collar and government sector, 3 million jobs lost," Wallace pointed out. "Major retailers like Neiman Marcus and J Crew declaring bankruptcy. And the nonpartisan Congressional Budget Office says unemployment at the end not of this year, but of 2021, will still be 9.5 percent," the journalist said.

"Question, are your rosy predictions based on economic reality or the November election?" Wallace asked.

Responding, Mnuchin asserted that he wasn't making "rosy" predictions, and that the large numbers represented real people who have been negatively impacted.

"My numbers aren't rosy. What I've said is, you're going to have a very, very bad second quarter and then I think you're going to see a bounce back from a low standpoint," he explained. Mnuchin noted that economic models have never before been used to predict what will happen when you close down the economy due to medical reasons.

"So my predictions are based on what I see as the rate of reopening in a careful way," the secretary noted. "It's also based upon my views, and I've personally heard from many of the doctors that have vaccines and virals in trials, and their expectations of being able to get a vaccine by the end of this year and having real viral treatment, the advent of testing. All these things are going to help give American businesses, American workers the confidence to reopen in a careful and deliberate way," he said.

A big part of Trump and Republican's re-election message was intended to be focused around the good economy and the country's historically low unemployment rate in the first three years of Trump's presidency. But with the rapidly spreading novel coronavirus pandemic, much of the economy was shut down in March, leading to an unprecedented surge in unemployment and a drastic drop in gross domestic product (GDP). Now Trump and his campaign have shifted their message to argue that the president is the best-suited candidate to rebuild in the wake of the economic downturn.

The April jobs report from the Department of Labor, which was published on Friday, showed that the official unemployment rate has jumped by double-digits from its historic low of 3.5 percent in February to more than 14 percent. The report noted that more than 20 million jobs had been lost. Meanwhile, economists project that the actual unemployment rate is already north of 20 percent and could rise significantly higher.

But Trump's economic advisers, as well as many analysts from the private sector, have predicted that the economy will rebound swiftly in the second half of 2020, while the coming months are expected to continue to bring a historic downturn.

Donald Trump and Steve Mnuchin
President Donald Trump and Treasury Secretary Steven Mnuchin participate in the daily coronavirus task force briefing at the White House on April 21 in Washington, D.C. Drew Angerer/Getty

"I don't want to sugarcoat any of this because it's so difficult. I don't think the numbers are going to turn up in the next few weeks. I think in May, the job figures are going to be very difficult," Larry Kudlow, the director of President Donald Trump's National Economic Council, said in a Saturday interview with Fox News. However, he suggested things would improve significantly by the end of the year.

"While job losses of 20.5 million looks terrible, we see several signs within the underlying data that indicate the potential for a quicker recovery in the labor market is plausible," Charlie Ripley, senior investment strategist for Allianz Investment Management, said in a statement emailed to Newsweek.

"The number of unemployed that are on temporary layoff spiked above 18 million meaning those jobs could come back quicker as the economy begins to open up. Additionally, the average hourly earnings figure jumped to 4.7 percent, for the month which indicates that most of the jobs lost were in the lower end of the pay scale," Ripley explained. "Lastly, the composition of job losses was higher in the industries that have been affected the most, including the hospitality and leisure sectors."