President Donald Trump’s economic advisers predict the ongoing partial government shutdown will have a substantially worse impact on the U.S. economy this quarter than they originally estimated, The New York Times and CNBC reported Tuesday.
The shutdown, which entered its 26th day on Wednesday, slashes quarterly economic growth by 0.13 percentage points for every week it lasts, Kevin Hassett, the chairman of the Council of Economic Advisers, told the Times.
The CEA originally calculated a 0.1 percentage point loss every two weeks. The agency’s latest calculation means the economy has already lost about half a percentage point since the shutdown began on Dec. 22, according to the Times.
Over 800,000 federal employees across several agencies, including the Department of Homeland Security and the Interior Department, have been furloughed or, if deemed essential, continue to work without pay during the shutdown.
Federal workers will likely receive retroactive pay once the government reopens, but many are struggling to pay rent and buy necessities in the interim. Government contractors are unlikely to get back pay for work they’ve missed.
The shutdown has a domino effect on communities across the country. Financially strapped federal workers are likely to spend less, which has left some businesses reeling.
And there appears to be no end in sight for the shutdown ― the longest such closure in U.S. history. Trump has vowed to veto a spending bill that would reopen federal agencies affected by the shutdown if it does not include more than $5 billion for his long-promised wall along the U.S.-Mexico border. Democrats have steadfastly rejected his demand, calling the wall ineffective and immoral.
Hassett on Tuesday continued to blame Democrats for the shutdown, which Trump said in December he would be “proud” to take the blame for. The CEA chair claimed the economy will take a big hit from the shutdown this quarter but likely will rebound in the future.
“In the fullness of time, this should not have a long-run effect on GDP growth,” Hassett told Fox Business Network. “It’s something that is going to be very painful this quarter.”
But some business executives and financial experts believe the shutdown could have long-lasting economic repercussions. JPMorgan Chase CEO Jamie Dimon told reporters Tuesday that the budget stalemate could gut the economy.
“Someone estimated that if it goes on for the whole quarter, it can reduce growth to zero,” Dimon said. “We just have to deal with that. It’s more of a political issue than anything else.”
HuffPost readers: Are you affected by the government shutdown? Email us about it. If you’re willing to be interviewed, please provide a phone number.