Treasury Secretary Scott Bescent said Thursday that government shutdowns could undermine U.S. economic growth.
“This is not a way to shut down the government and lower GDP,” Bessent said in an interview with CNBC’s “Squawk Box.” “We were able to see a hit to GDP, a hit to growth, a hit to Working America.”
Cabinet officials spoke on the second day of the government’s closure as two fighting aspects of Washington, D.C. have yet to come to an agreement on an ongoing resolution that will allow spending and operations to proceed.
US growth has been in an upward orbit for the past two quarters after the economy was thrown at the beginning of the year.
Gross domestic product rose at an annual pace of 3.8% in the second quarter, and is on a trajectory growing at the same rate in the recently completed third quarter, according to the Atlanta Federal Reserve GDPNOW Tracker.
Previous government shutdowns have had little impact on growth, but a long-term suspension could do some damage, especially if President Donald Trump permanently fires around 750,000 federal workers affected by the current situation.
When asked if Trump was considering the move, Bescent called it “a topic.”
“Senator (Chuck) Schumer, Representative (Hakeem) Jeffries, you know, they’re weak, they’re unmistakable,” Bescent said of the Democratic leaders of the Senate and House respectively. “They don’t represent the Americans. You know they’re making excuses.”
The labour market is currently one of the most sensitive parts of the economy. Private pay fell 32,000 in September, reflecting a slower employment rate, according to the ADP.
Although weekly unemployment claims have been largely restrained, this year’s layoffs have been at the highest level since 2020, the year of community pandemics and abolishing companies’ challengers.
On another issue, Bessent said news will be released on Tuesday about “substantial support” for farmers, particularly the soybean industry.
He also said he continues to find alternatives to Federal Reserve Chairman Jerome Powell, whose term expired in May 2026. The first round of interviews has been completed, and the second one will begin next week, eventually creating a list of three to five candidates introduced to Trump for the final decision.
