Shutdown Could Wipe Out Economic Growth in Q1

Marco Green
January 25, 2019

Hassett told CNN in an interview on Wednesday that USA economic growth could be zero for the first quarter if the partial federal government shutdown lasts through March - a warning some Wall Street economists have also issued. But that changed a bit Wednesday, just as President Donald Trump gears up for a re-election campaign that he wants to focus, in part, on what he says is a roaring economy with low unemployment.

Chairman of the Council of Economic Advisers Kevin Hassett told CNN on Wednesday that first-quarter growth could come very close to zero should the shutdown drag on to March.

Kevin Hassett, the chair of President Donald Trump's Council of Economic Advisers, offered a frank assessment about the possible cost of the ongoing government shutdown, warning the closure could result in a mess for the United States economy. "We're looking for 3 percent growth this year as well because of all the momentum".

Hassett said the combination of a shutdown and usual economic slowness between January and March could quash growth in that quarter entirely, but that the USA economy would bounce back immediately.

However, he said that he expected the economy to bounce back when the government reopens and that the number for the second quarter would be "humongous" if the government shutdown ends by then.

With respect to the furloughed federal employees who have missed their paychecks amid the shutdown, the economic adviser said he himself and his staff are "dealing with the very very hard problem" of not getting a paycheck.

The Senate scheduled votes on spending legislation that would end the shutdown for Thursday - beyond a midnight Tuesday deadline for those checks to go out. No one likes the hardship that people are having to shoulder, including myself.

"I don't want to dance away from that". "I don't think that there's any risk at all, given how strong the economy is, that we will be downgraded". "We're a free market economy", he added. Some 420,000 of the 800,000 federal workers not now getting paid automatically will get back pay when the government reopens, and Congress passes a bill last week to give the 380,000 furloughed workers back pay as well.

Other reports by Click Lancashire

Discuss This Article

FOLLOW OUR NEWSPAPER