Mnuchin says US recovery has begun, will gain strength in third and fourth quarters

US Treasury Secretary Steven Mnuchin said on Wednesday that the US economy has already begun to rebound from the coronavirus pandemic and would "improve dramatically" in the third and fourth quarters.

Mnuchin, who appears before the US Senate Small Business Committee to review the progress of federal coronavirus rescue loan programs, said in written testimony that incoming jobs and other economic data "show that we are well-positioned for a strong, phased reopening of our country.''

Mnuchin and Jovita Carranza, Administrator of the Small Business Administration, are expected to face tough questions over initial glitches in launching the $660 billion Paycheck Protection Program to provide forgivable loans aimed at keeping employees of small businesses on payroll for eight weeks during the lockdown.

Many small businesses had difficulties getting loans due to technical glitches, while some well-financed publicly traded companies accessed multi-million dollar loans, prompting Mnuchin to issue new guidance requiring the companies to return the funds.

"As you might expect with a program of this magnitude executed on a national scale in record time, we initially experienced some complications. We resolved them quickly," Mnuchin said in his testimony.

He said that the program was supporting employment of about 50 million workers and more than 75 percent of the small business payroll in all 50 states.

Despite the Treasury chief's optimism over the economy, it has a long road back. While May jobs data unexpectedly improved, unemployment remains at 13.3%, a post-World War Two high, with the jobless rate still rising for blacks and Asians and recovery to prior levels expected to take years.

The World Bank said on Monday that the U.S. economy will still shrink by 6.1% this year, with further downward revisions likely for its global forecast of a 5.2% contraction.