Federal Reserve chief Jerome Powell says, extending the Govt shutdowns will hit the U.S. economy

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The U.S federal reserve system chairman Jerome Powell on Thursday said that “The united state’s economy may face a big dent if the government shutdown continues for a long time.”

While talking at the Economic Club of Washington, D.C. Jermoe said, “While most of the previous government shutdowns have been fairly short which haven’t affected the U.S economy in a big way, but if we have an extended shutdown, I think that would show up in the data pretty clearly.”

It is interesting to know that, the government shutdown is going on since December last year because President Trump refused to sign a budget agreement unless Congress agrees to allocate $5 billion funds to the government for building the border wall.

Jerome said, “Normally the shutdowns are relatively brief and therefore have a little effect on the economy, even if it affects few hundreds of thousands of workers furloughed as a result of funding lapse including those two which were shut down under trump administration, but this shut down is far longest than ever.”

Jerome added, “In the short term, if government shutdowns don’t last very long, they typically have not left much of mark on the economy, which isn’t to say, there’s plenty of personal hardships that people undergo.” “But the aggregate level of the economy generally does not reflect much damage from a shutdown,” it added.

Kevin Hassett, one of the key advisors for the economy in Trump administration, also stated that “The U.S. economy may appear to lose jobs in January for the first time in nearly a decade as a result of the government shut down.”

About 800,000 federal workers, including air traffic controllers and members of the Coast Guard, are going to be affected because of not getting paid for three weeks which as a result may lose the jobs if the shutdowns continued.