• Kevin Hassett estimates the shutdown is costing about $15 billion per week and will cut U.S. GDP by roughly 1–1.5 percentage points in Q4 2025.
  • Around 60,000 private-sector jobs have already been lost due to reduced economic output and lower spending in affected regions.
  • Key economic reports are delayed or partially missing, leading to what Hassett calls shutdown-related 'effects on the data' and a 'normal' sentiment collapse during such events.

Kevin Hassett, a senior White House economic adviser, is warning that the prolonged federal government shutdown is severely distorting U.S. economic data, both by directly hurting growth and jobs and by interrupting the normal collection of statistics. His remarks, delivered in a briefing to reporters on Thursday, highlight the mounting economic toll of the funding lapse, now the longest in U.S. history.

Hassett estimates the ongoing shutdown is costing about $15 billion per week and will cut U.S. GDP by roughly 1–1.5 percentage points in Q4 2025. That’s a significant hit relative to the roughly 1.6% annualized growth rate seen in the first half of 2025, according to people familiar with the matter. He says around 60,000 private-sector (non-federal) jobs have already been lost due to reduced economic output and lower spending in affected regions, particularly in businesses tied to federal operations like contractors, service providers near federal facilities, and local retail and hospitality.

Efforts to assess the damage have hit a snag, however, because many federal statistical agencies were closed. Because of this, key economic reports are delayed or partially missing, leading to what Hassett calls shutdown-related 'effects on the data' and a 'normal' sentiment collapse during such events. The White House expects the September jobs report to be released, but October data will be incomplete, notably lacking the household survey that produces the unemployment rate and labor-force participation rate, according to administration officials who spoke on condition of anonymity.

'What we're seeing is a fairly regular pattern where business and consumer sentiment tends to collapse during these events,' Hassett said, paraphrasing his internal assessment. 'It creates a lot of uncertainty, and that shows up in the data—or in this case, the lack of data.'

Economists caution the 60,000 job-loss figure may be conservative, as shutdown ripple effects can deepen over time. Stephan Weiler, an economist at Colorado State University, argues the estimates may understate the full cost, given multiplier effects and the cumulative hit to sentiment. Firms with government contracts or that supply agencies have reduced hours or staff due to revenue shortfalls, and some analysts say the federal government workforce is now 'permanently smaller,' implying persistent structural changes.

Without a deal to restore funding, the economic distortions are likely to worsen. The damage stems from a federal funding lapse that led to the protracted shutdown, and Hassett’s remarks come as the administration faces pressure over both the economic toll and the loss of statistical transparency. Distorted or missing data for key months will complicate trend analysis, forecasting, and policy evaluation well beyond the shutdown period, making it harder for policymakers and the Federal Reserve to calibrate interest-rate and fiscal decisions.

In the short term, once funding is restored, some activity—especially delayed spending—is expected to rebound, but lost private-sector income and some jobs may not fully return. Analysts expect months of 'digging out' for agencies to clear backlogs and normalize operations and data collection. Economists warn of a persistent drag on Q4 2025 growth and possible spillover into early 2026, depending on how quickly confidence and hiring recover.

Attempts to reach other White House officials for additional comment were not immediately successful. The episode follows earlier U.S. government shutdowns, which also caused measurable but typically temporary GDP hits and disruptions to data releases, though the duration and scale of the current event make the damage larger and more complex to unwind.