In an interview with CNBC, Hassett said the growth outlook for the U.S. may be a little “cloudy” after the pause in data collection caused by the government shutdown.
- Surveys used to track inflation and employment were disrupted by furloughs at major agencies during the longest-running government shutdown on record.
- Kevin Hassett said the prolonged shutdown may leave permanent gaps in U.S. economic data.
- Hassett added that inflation trends remain favorable and growth could rebound next year.
White House National Economic Council Director Kevin Hassett reportedly said on Tuesday that the record-long government shutdown could leave permanent gaps in U.S. economic data, which would, in turn, complicate efforts to assess the country’s growth outlook.
“I’ve been told that some of the surveys were never actually completed, so we’ll never, perhaps, even know what happened in that month,” Hassett told CNBC. “We’re going to be staring a little bit in cloudy weather for a while until we get the data agencies back up.”
The shutdown, which has now lasted 42 days, has paused operations at key statistical agencies, including the Bureau of Labor Statistics (BLS) and the Census Bureau.
Hassett Sees Positive Inflation Trend
Hassett said inflation trends remain “positive,” pointing to recent consumer price data coming in below projections. He added that momentum is moving toward the Federal Reserve’s inflation target, and that the White House is studying ways to ease housing costs for Americans.
While acknowledging that the shutdown will weigh on near-term growth, Hassett said he expects the economy to rebound strongly once government functions return to normal. “Some of the stuff is lost forever, and some of it isn’t,” he said. “But I would guess by the first quarter of next year, we’ll be back at the 3 or 4% growth pace.”
Congress Moves to End Shutdown
The Senate passed a bill late Monday to reopen the government, and the House is expected to approve the measure by Wednesday evening. Once signed by President Donald Trump, it would bring an end to the longest government shutdown in U.S. history.
U.S. stocks traded mixed in midday trade on Tuesday. The SPDR S&P 500 ETF (SPY) gained 0.14%, the SPDR Dow Jones Industrial Average ETF (DIA) rose 1.03%, but the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) moved 0.57% lower. Despite the downward movement, retail sentiment around QQQ improved to ‘extremely bullish’ from ‘bullish’ territory over the past day, accompanied by ‘high levels of chatter.
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Editor’s Note: The headline has been rectified to reflect that the data may never be recorded.<