4Q GDP report delayed by shutdown, but here's what to expect

By Economic IndicatorsFOXBusiness

Kevin Hassett on the partial government shutdown's impact on US GDP

White House Council of Economic Advisers Chairman Kevin Hassett on the impact of the partial government shutdown on U.S. economic growth and concerns over a potential recession.

The government might have reopened after a 35-day shutdown, but this week’s highly anticipated report on the overall health of the U.S. economy is still delayed as a result of the budget impasse.

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On Wednesday, the Bureau of Economic Analysis (BEA) was supposed to release the fourth-quarter gross domestic product (GDP) and also for the entirety of 2018; it has not yet said when it will release the economic reports.

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The BEA reopened on Monday and is consulting with the U.S. Census Bureau to evaluate the availability of the thousands of data series used to produce the economic indicators; once it does so, it will work with the Office of Management and Budget to publish a revised schedule for its economic releases. The BEA reopened on Monday, but the highly anticipated GDP report will be delayed.

While it’s not an official forecast, GDPNow, a real-time tracker monitored by the Federal Reserve Bank of Atlanta, is estimating fourth-quarter growth of 2.7 percent, as of Tuesday. That estimate is the same as it was on Dec. 21, the day before the shutdown began.

In the third quarter, the U.S. economy grew at a rate of 3.5 percent, according to the BEA.

While the shutdown will likely have minimal effect on the fourth-quarter 2018 GDP, it could leave a mark on the first quarter 2019 GDP. The Trump administration said in the middle of January that the shutdown was costing it about 0.13 percent point per week.

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“That includes the effect of work not done by 380,000 furloughed Federal workers (0.08 p.p. per week) plus the work not done by Federal contractors (0.05 p.p. per week),” a senior White House official said.

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