Recession warnings pile up as shutdown wraps up fourth week

Maryland resident Rosa Marquez displays her bills while standing near other furloughed security officers and custodians outside Senate Majority Leader Mitch McConnell’s office. An extended shutdown could push first-quarter growth close to or even below zero. Credit: M. Scott Mahaskey, Politico

The impasse is triggering alarms about an already fragile economic environment.

The partial government shutdown was supposed to be a brief non-event for the economy. Now it’s starting to look like a serious crisis that could nudge the U.S. toward recession and threaten President Donald Trump’s economic message during his reelection campaign.

Across Wall Street, analysts are rushing out warnings that missed federal paychecks, dormant government contractors and shelved corporate stock offerings could push first-quarter growth close to or even below zero if the shutdown, which is wrapping up its fourth week, drags on much longer.

Their broader fear: The protracted impasse could convince consumers and businesses that the federal government will spend all of 2019 on the brink of crisis — whether on the border wall, trade with China or the debt limit. That could choke business investment and consumer spending, bringing an end to one of the longest economic expansions on record.

View the complete January 17 article by Ben White on the Politico website here.