White House Adviser Warns of Severe Impact from US Government Shutdown
The ongoing U.S. government shutdown is having a more severe economic impact than previously anticipated. The Director of the National Economic Council, Kevin Hassett, expressed concern over slowing construction projects and declining travel during an interview with Fox Business Network.
Severe Impact on Key Sectors
According to Hassett, the travel and leisure sectors are particularly hard hit. He warned that continued disruption in air travel over the next couple of weeks may lead to a significant downturn in these industries. He stated:
- Travel and leisure sectors are experiencing severe challenges.
- Air travel disruptions could worsen in the near term.
Labor Market Effects
The labor market is showing signs of softness, which Hassett attributes to uncertainty surrounding the 38-day government shutdown. While he refrained from declaring a recession in any part of the U.S. economy, he noted that the situation is causing apprehension among businesses and consumers alike.
Hassett also expressed disappointment with Federal Reserve Chairman Jerome Powell’s remarks about potentially pausing interest rate hikes in December. However, he remains optimistic about a rebound.
Future Economic Outlook
Despite the current challenges, Hassett believes the U.S. economy will recover rapidly following the end of the shutdown. The anticipation of a swift turnaround highlights the resilience of the economy, which is contingent upon resolving the government impasse.
In conclusion, while the immediate effects of the government shutdown are creating significant turbulence in various sectors, experts like Hassett foresee a brief period of recovery once the federal operations resume.
