Topline White House adviser Kevin Hassett expressed significant concern on Friday regarding the ongoing government shutdown, stating that its effects are “far worse than we expected.” Hassett, who serves as the director of the National Economic Council, warned that the airline industry could face “at least a near-term downturn” if the shutdown continues.
During an interview with Fox News, Hassett underscored that the prolonged nature of the shutdown has exacerbated its negative impacts, revealing that the anticipated growth of the U.S. GDP for the fourth quarter is now predicted to be only half of the initially estimated 3%. He emphasized that if disruptions in air travel persist for “another week or two,” it could lead to a significant downturn in the airline sector.
As the shutdown—now the longest in U.S. history—surpassed 38 days, Hassett noted a concerning slowdown in the job market and in various construction projects. He stated, “we’re starting to see pockets of the economy that look like they’re in a recession.” This echoes previous remarks made by Treasury Secretary Scott Bessent, who also highlighted similar economic trends. Hassett maintained that the key to recovery lies in reopening the government, confidently asserting, “the economy will recover and we’ll be doing fine if we can just get the government opened.”
Hassett voiced particular worry about the future of the government workforce, citing concerns that regular shutdowns could deter potential employees from pursuing careers in the federal sector. His insights reflect a broader apprehension about the long-term implications of repeated government shutdowns on the labor market.
In addition to his economic forecasts, Hassett expressed disappointment regarding the Federal Reserve's recent indications that it may not cut interest rates as previously anticipated in December. He argued that the circumstances surrounding the government shutdown should actually make the Fed more inclined to adjust interest rates, suggesting that a proactive approach could mitigate some of the economic fallout from the ongoing crisis.
In summary, the ongoing government shutdown is having a profound impact on the U.S. economy, with significant implications for growth, the airline industry, and the federal workforce. As the situation continues to develop, the focus remains on the essential need to reopen the government to foster economic stability and recovery.
