US can see zero Q1 growth due to shutdown: WH adviser

Thursday, 24 January 2019, 04:25 Hrs
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US can see zero Q1 growth due to shutdown: WH adviser

A top White House economic adviser has said that the country could see zero growth in gross domestic production in the first quarter due to the ongoing partial government shutdown.

Asked whether it could lead to no growth of the country's economy in Q1 in case it continued beyond March, Kevin Hassett, chairman of White House Council of Economic Advisers told CNN on Wednesday said: "Yes, it could."

"It is true that if we get a typically weak first quarter and then have an extended shutdown, we could end up with a number that is very very low," Hassett said.

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.

The growth rate "would be like 4 or 5 per cent," Xinhua quoted Hasset as saying.

Adopting an optimistic tone about the current status of the overall US economy, Hassett said the US is "at a time in the business cycle that is especially good for people who have been separated from society and disadvantaged by the weak economy of the Great Recession", and right now the income at the lower end of the society is growing faster than for people as a whole.

With respect to the furloughed federal employees who have missed their paycheques amid the shutdown, Hasset said that he himself and his staff were "dealing with the very very difficult problem" of not getting a paycheques. 

Since the shutdown began on December 13, Hasset said one of his staffers has started driving for Uber since that's the only way he can pay his bills and feed his family.

The partial government shutdown, triggered by a partisan impasse over President Donald Trump's demand for funding of a border wall with Mexico, has been affecting some 800,000 federal workers and has now stretched to the 33rd day, eclipsing all previous closures.

"I think if people are not getting paid and they face the kind of uncertainty that we are putting them under -- and we did it 22 times in a couple of decades -- we've got a political system that's not fundamentally serving us," Hassett said. 

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Source: IANS
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