Overview
- National Economic Council Director Kevin Hassett said the 38-day federal shutdown is hurting growth more than anticipated and projected a rapid bounceback once funding is restored.
- He cited pronounced weakness in travel and leisure with construction activity starting to slow as projects are put on hold.
- Hassett reported a softer labor market linked to shutdown uncertainty but declined to label any pocket of the economy in recession.
- The New Civil Rights Movement reported the FAA cut about 10% of flights in 40 major markets as unpaid air traffic controllers face mounting strain.
- Policy signals diverged as Treasury Secretary Scott Bessent recently said some sectors are in recession and Hassett criticized a potential Federal Reserve rate pause.