In an interview on CNBC’s “Squawk Box,” Hassett cited an internal White House report suggesting the shutdown could have serious economic consequences if it continues for too long.
“My friends over at the Council of Economic Advisers gave me a report at the end of the week that said that it costs the U.S. GDP [gross domestic product] about $15 billion a week for a shutdown, or about a tenth of a percent of GDP,” Hassett said Monday.
“And so if the shutdown continues for a long time, then there are going to be a lot of things that don’t happen, and it will show up in the GDP number,” he continued.
The White House memo also showed a monthlong shutdown would lead to an additional 43,000 unemployed people, not accounting for the 1.9 million federal civilian employees who are working without pay or are furloughed.
An estimate from EY-Parthenon predicted the government shutdown would reduce GDP growth by $7 billion each week, or 0.1 percentage points in the fourth quarter.
The hit to GDP reflects the reduced pay for furloughed federal workers, delayed government procurement of goods and services, and the resulting decline in final demand, according to the analysis.
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