US fourth-quarter GDP could be negative if shutdown drags on, White House economic adviser says

WASHINGTON - US economic growth in the fourth quarter could be negative if a federal shutdown drags on, White House economic adviser Kevin Hassett said in an interview that aired on Nov 9.

Mr Hassett, speaking to the CBS show Face the Nation, noted that a

shortage of air traffic controllers

was causing major travel delays in the run-up to the Thanksgiving holiday.

“Thanksgiving time is one of the hottest times of the year for the economy... and if people aren’t travelling at that moment, then we really could be looking at a negative quarter for the fourth quarter,” he said.

Airlines for America, which represents major carriers, said staffing issues had disrupted more than 4 million passengers’ travel plans since Oct 1, when the shutdown began.

By Nov 14, it estimated a daily US economic impact of US$285 million (S$371 million) to US$580 million.

The cuts, which began on Nov 7 morning, include about 700 flights from the four largest carriers: American Airlines , Delta Air Lines, Southwest Airlines and United Airlines.

During the shutdown, 13,000 air traffic controllers and 50,000 security screeners have been forced to work without pay.

Transportation Secretary Sean Duffy has earlier warned that the US flights

will be reduced to “a trickle”

due to rising air traffic control staffing shortages.

Major airlines were dealing with a third day of government-mandated flight cuts after thousands of delays and cancellations snarled traffic on Nov 8. The shutdown, which has reached a record 40 days, has led to shortages of air traffic controllers who, like other federal employees, have not been paid for weeks.

“It’s only going to get worse... the two weeks before Thanksgiving, you’re going to see air travel be reduced to a trickle,” Mr Duffy said on CNN’s State of the Union programme that aired on Nov 9. REUTERS