"It's Devastating": Kashakri Says Real Unemployment Rate Is As High As 24%

Minneapolis Fed president, Neel Kashkari, said that Friday’s jobs report will likely understate the real unemployment picture as it will only reflect people who are "actively looking for work", a nearly impossible task in a time of nationwide lockdowns, and that the country should steel itself for a “long, gradual” recovery.

"It asks people are you actively looking for work? And a lot of people who have just lost their jobs and were all sheltering in place — they’re not actively looking for work," Kashkari, who oversaw the Treasury bank bailout program after the 2008 Wall Street crash, said on NBC’s “Today” show.

He said the Friday jobs report that covers April will likely show an unemployment rate of 16% or 17%, but that the real number is around 23% or 24%, adding that "it’s devastating."

"I’m hopeful that we can bounce back,” he said. “I don’t think we’re actually headed for another Great Depression."

Kashkari's comments came shortly before the DOL reported that another 3.2 million Americans had filed initial jobless claims, bringing the seven-week total to a staggering 33.48 million.

Looking ahead Kashkari said the U.S. is likely in for a "long, gradual recovery", one which if the uber-dove had his way - and he certainly will try - would lead to negative rates, which according to bond king Jeff Gundlach would lead to a "fatal" outcome:

These Trillions Treasury is borrowing is heavily in T-Bills. Chair Powell has stated in plain English he is opposed to negative interest rates. Yet the pressure to go negative on Fed Funds will build as short term borrowing explodes and dominates.  Please, no.  Rates < 0 = Fatal.