The White House warned on Sunday that if the federal government shutdown (partial suspension of operations) continues through the end of the month, the U.S. economy could contract in the fourth quarter.
Kevin Hassett, Chairman of the White House National Economic Council (NEC), said in an interview with CBS, “Thanksgiving is one of the hottest times of the year for the economy. It’s Black Friday, you know, and all that kind of stuff. And if people aren’t traveling at that moment, then we really could be looking at a negative quarter for the fourth quarter.”
Hassett noted that Goldman Sachs estimated the GDP loss from the shutdown at 1.5%. “I think that number is probably low if we keep going even a couple more weeks, because there’s going to be a massive amount of air disruption, especially around the holidays,” he added.
The shutdown, which began on November 1 after the Senate failed to pass a temporary budget, has now reached a record-breaking 40 days. Across the country, flight delays and cancellations are mounting due to air traffic control staff shortages.
U.S. Secretary of Transportation Sean Duffy told Fox News, “As Thanksgiving approaches, more people want to travel to see family. However, air travel will be severely restricted. We anticipate only a fraction of air traffic controllers will be on duty.”
The Federal Aviation Administration (FAA) has already ordered 40 major airports to gradually reduce flights by 10% until Friday. Duffy warned that the situation is likely to deteriorate until controllers receive their paychecks, adding, “If the staffing crisis worsens, the FAA may cut flights by up to 20%.”
In a CNN interview, Duffy elaborated, “Many air traffic controllers are young, earn less than 100,000 USD annually, and are often single parents. They have no choice but to make decisions for their families rather than go to the control tower to make a living.”
