An economic adviser stated that the persistent government impasse has gravely affected the travel, hotel, and construction sectors.
White House economic adviser Kevin Hassett has cautioned that the US government shutdown is causing economic harm “far worse” than initially projected and could halve fourth-quarter GDP growth.
Speaking to Fox Business in a Friday interview, he explained that the 38-day shutdown, the longest ever in the US, is especially impacting the travel, hotel, and construction industries.
He stated, “The economic repercussions are much more severe than anticipated due to its prolonged duration.”
Hassett noted, referencing recent Goldman Sachs estimates, that the shutdown’s effects might reduce US GDP growth by 1% to 1.5% during the October-December quarter.
He further commented, “We anticipated at least 3% growth in the fourth quarter… however, we now foresee approximately half of that.”
Hassett observed, “The travel and leisure sector is currently experiencing a significant impact,” and cautioned that should the shutdown continue to affect air travel employees’ pay for “an additional week or two,” the industry might experience “a short-term decline.”
Multiple news sources have reported that US airlines canceled approximately 700 flights across 40 major airports nationwide on Friday, following recent reductions announced by the Federal Aviation Administration (FAA).
Due to shortages of air traffic controller personnel resulting from the shutdown, the FAA mandated a 4% decrease in flights on Friday. As per the FAA’s emergency directive, these reductions are slated to progressively increase to 10% by this time next week if the shutdown persists.