Jim Cramer: 'We Could Be on the Verge of a Depression'

Investment guru Jim Cramer isn’t holding back in warning investors about where he sees the U.S. economy headed amid the seemingly endless coronavirus crisis.

“I’ve got to be honest with you: We could be on the verge of a depression. Not a recession, a depression if things don’t go right,” Cramer said on CNBC.

“The bad numbers are just beginning, which is why the averages got hit today,” the “Mad Money” host said.

Cramer spoke late Friday hours after Wall Street's main indexes fell more than 1.5% as the coronavirus abruptly ended a record U.S. job growth streak of 113 months, intensifying fears of a deep economic slowdown.

“As much as I love that the government’s basically keeping businesses on life support through this difficult period, at the end of the day there are no customers,” he said.

“This is gonna be a brutal period, but if we handle things right, it will be a short depression,” he added. “Still, I think we’re making some real progress on the economic front,” he said.

“I have to emphasize that this is mainly a public health crisis that’s morphed into an economic crisis,” Cramer said. “The only way to get back to normal is by defeating this plague, which is why the government needs to go all out.”

Even the loss of 701,000 jobs that Labor Department data showed for March did not completely capture the economic damage from the virus. The survey considered data only until mid-March, before widespread U.S. lockdowns put more people out of work, Reuters explained.

The worldwide spread of the virus has forced billions of people to stay indoors and pushed entire sectors to the brink of collapse, triggering mass layoffs and dramatic steps by companies to raise cash. "Even as investors may be bracing for some grim economic reports over the next several weeks, we got a very sober reminder of what is to come by way of today’s jobs report," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

Investors were also anxious heading into the weekend due to the possibility for "particularly ugly" weekend news on coronavirus case counts or new hot spots around the country, Luschini said.

Meanwhile, Cramer is far from alone in his dire economic predictions.

Economist Stephen Moore is warning that the United States could be headed into another Great Depression if the “lock-down of our economy” isn’t restarted by May.

In an interview with radio host John Catsimatidis aired Sunday, Moore, who has advised President Donald Trump in the past, said the U.S. unemployment rate could get as high as 23% as the coronavirus pandemic ravages the nation.

“At some point soon, we’re going to have to make some real decisions about what kind of a calamity we are causing through the lock-down of our economy. I’m not saying we should be inattentive to the public health concern,” he said in portions of the interview posted by The Hill.

“But at some point, we have to worry about what we’re doing to our society, and what kind of economy we’re going to have after this is all over,” he said.

“If we go much past May 1, we are facing a potential Great Depression scenario," Moore added.

In 1933, the unemployment rate was around 25%.