U.S. GDP at Risk: Treasury Secretary Bessent Warns of Potential Impact from Government Shutdown

Treasury Secretary Scott Bessent recently shared his thoughts about the effects of the ongoing government shutdown on the U.S. economy. He warned that this situation could harm economic growth. During a CNBC interview, he stated, “This isn’t the way to have a discussion, shutting down the government and lowering the GDP. We could see a hit to the GDP, a hit to growth, and a hit to working America.”

The government shutdown started when lawmakers failed to agree on a budget, and as a result, many federal workers are currently out of a job. Even though past shutdowns often had little long-term impact on economic growth, a prolonged shutdown could lead to more significant issues. If President Trump were to make deeper cuts and lay off a large number of federal employees, it could further strain the economy.

Currently, the U.S. economy has been improving. Recent data shows that the Gross Domestic Product (GDP) grew at an annual rate of 3.8% in the second quarter and is expected to maintain a similar pace for the third quarter, according to the Atlanta Fed’s GDPNow tracker. However, even with this growth, warnings about the labor market are rising. ADP data shows a decline of 32,000 private payroll jobs in September, signaling hiring challenges.

Layoffs are also increasing, with reports indicating that 2023 has seen the highest number of layoffs since 2020. The rise in unemployment claims reflects the unease within the job market, making workers anxious about their futures.

On another note, Bessent mentioned forthcoming support for farmers, especially in the soybean industry, to help mitigate the challenges they face. He also hinted at ongoing discussions regarding a successor for Fed Chair Jerome Powell, whose term will end in May 2026.

In our current digital landscape, reactions to the shutdown can be seen on social media, with many expressing frustration and confusion about the situation. Discussions showcase how this affects everyday Americans, highlighting their struggles and the urgent need for a resolution.

The future remains uncertain. Experts believe that if both parties don’t reach an agreement soon, the impacts on growth and employment could deepen. While hope remains for a swift resolution, many are left waiting to see how this will all unfold.



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