Business Roundtable warns shutdown doing damage to U.S. economy

A leading business group said Wednesday that the 33-day-old partial government shutdown is hurting the U.S. economy.

The Business Roundtable, representing employers with 15 million workers, urged Congress and the administration to “work together to end” the impasse.

“The shutdown is harming the U.S. economy and American workers, both federal employees and those in the private sector supporting government functions,” the group said in a statement. “The shutdown is also preventing policymakers from focusing on solutions to create strong, sustained economic growth in America.”

It said a bipartisan solution “will allow the country to move forward with an agenda to maximize opportunities for U.S. workers and support economic growth.”

Studies by economic analysts and the White House say the shutdown could curtail growth, with 800,000 federal employees not receiving paychecks and federal contractors losing business. The full impact isn’t yet known; some of the government agencies that track economic growth data are themselves shuttered.

A top White House economic adviser said Wednesday the U.S. economy could show no growth in the first quarter if the partial government shutdown extends through March.

“The first quarter has tended to be weak. … With an extended shutdown, we could end up with a number that’s very low,” Council of Economics Chairman Kevin Hassett said on CNN.

Asked if the nation could see zero growth, Mr. Hassett said, “Yes, we could.”

A leading business group said Wednesday that the 33-day-old partial government shutdown is hurting the U.S. economy.

The Business Roundtable, representing employers with 15 million workers, urged Congress and the administration to “work together to end” the impasse.

“The shutdown is harming the U.S. economy and American workers, both federal employees and those in the private sector supporting government functions,” the group said in a statement. “The shutdown is also preventing policymakers from focusing on solutions to create strong, sustained economic growth in America.”

It said a bipartisan solution “will allow the country to move forward with an agenda to maximize opportunities for U.S. workers and support economic growth.”

Studies by economic analysts and the White House say the shutdown could curtail growth, with 800,000 federal employees not receiving paychecks and federal contractors losing business. The full impact isn’t yet known; some of the government agencies that track economic growth data are themselves shuttered.

White House National Economic Council Director Larry Kudlow said Tuesday that he expects to see “an immediate snapback” for the economy when the shutdown ends.

“When the government reopens — and I’m not here to negotiate; I’m not going to make a prediction, that’s up to the president — you will see an immediate snapback,” Mr. Kudlow said.

So far, most companies have reported stronger-than-expected earnings for the fourth quarter of calendar year 2018. Stocks traded higher early Wednesday after the release of strong corporate earnings from IBM, United Technologies and Procter & Gamble. Of the companies reporting fourth-quarter results so far, 72.6 percent have topped analyst estimates, CNBC reported, citing data from FactSet. But only 57.5 percent of those companies have beaten sales forecasts.

The shutdown began on Dec. 22, late in the fourth quarter.

The Consumer Bankers Association is urging the White House and Congress to “explore all options” to reopen Small Business Administration loan programs, saying the shutdown is hurting small businesses nationwide.

CBA President and CEO Richard Hunt wrote in a letter to elected leaders that the shutdown is affecting as many as 300 loans per day, with about $2 billion in lending delayed so far.

“Small businesses were among the first to feel the effects of this shutdown due to the inability of the SBA to process and guarantee loans within its programs, including the important 7(a) and 504 programs, among others,” Mr. Hunt wrote.

“These programs, which work with preferred lenders, remain a vital source of lending for many small businesses that would not otherwise qualify for conventional lending.”