Trump's government shutdown is costing the economy at least $1.2 billion per week

Kevin Hassett

White House Council of Economic Advisers chair Kevin Hassett says that “I don’t really expect to see big economic effects of this [government shutdown] … assuming that it ends relatively quickly.” By that, he meant that the shutdown is costing the U.S. economy a mere $1.2 billion per week. Other analysts aren’t as optimistic.

JPMorgan’s Michael Feroli estimates the shutdown’s effects as being two to four times what Hassett forecast. It’s also early days now, going by Donald Trump’s threats about keeping things shut down for months or years, and “each month that it goes forward, the effect grows exponentially,” according to Bank of America Merrill Lynch’s Ethan Harris. “If it goes on for a quarter … now you’re starting to really change spending habits.”

Fitch Ratings warned of possible damage to the federal government’s credit rating, not just because of broader political turmoil: “The main implication for our U.S. sovereign credit view will depend on whether we feel this shutdown foreshadows a more pronounced destabilization of fiscal policymaking, including brinkmanship over the debt limit.”

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