The White House has sounded a serious economic warning as the federal government shutdown enters its 40th day — the longest in American history. Kevin Hassett, Director of the National Economic Council, cautioned that if the political deadlock continues, the U.S. economy could slide into a negative growth phase during the fourth quarter of 2025. Speaking in an interview on CBS’s “Face the Nation,” Hassett explained that the ongoing shutdown is beginning to disrupt key sectors of the economy, particularly transportation, aviation, and consumer spending ahead of Thanksgiving — one of the busiest travel periods of the year.
He pointed out that the shortage of air-traffic controllers, many of whom are working without pay, has led to a cascade of flight cancellations and severe delays across major airports. “Thanksgiving is one of the busiest times of the year for the economy, and if people cannot travel during that period, we could be looking at a negative quarter for the fourth quarter,” Hassett said. His concern underscores the link between travel-related consumer activity and overall U.S. GDP performance, as millions of Americans typically spend on air tickets, hotels, dining, and retail during this holiday season.
The economic adviser’s warning comes amid mounting anxiety within the administration and the airline industry. With the shutdown freezing pay for hundreds of thousands of federal employees, including essential aviation staff, the strain is rippling through the economy. Analysts now predict that continued disruption could erase earlier growth momentum and push overall quarterly output below zero. Economists have also noted that consumer confidence, logistics activity, and domestic travel — which together drive a significant portion of Q4 economic output — are all beginning to contract as the shutdown drags on.
At the same time, Treasury and transportation officials have acknowledged that the damage may extend well beyond aviation. Supply chains are being disrupted, airport operations are under stress, and passenger volumes have dropped sharply as travelers cancel or delay their plans. The White House’s internal projections reportedly suggest that each additional week of shutdown could shave billions off GDP, threatening to undo months of post-pandemic recovery and wage gains across multiple industries.
Flight Cancellations, Staffing Crisis, and Industry-Wide Turbulence as Shutdown Deepens
Across the United States, the situation at airports is worsening rapidly. On Sunday, more than 2,200 flights were canceled and thousands more delayed as the aviation system struggled under the weight of staff shortages and low morale. Transportation Secretary Sean Duffy warned that air travel could slow to a “trickle” in the days ahead, as the Federal Aviation Administration continues to operate with an acute shortage of air-traffic controllers. Duffy confirmed that the staffing crisis is directly tied to the government shutdown, which has left vital employees unpaid for nearly six weeks.
He explained that the lack of available personnel is forcing airlines to cut routes and scale back schedules dramatically. “It’s only going to get worse. During the two weeks before Thanksgiving, you’ll see air travel drop significantly,” Duffy said during an appearance on CNN’s “State of the Union.” His comments reflect a grim reality: the shutdown has triggered a chain reaction across the aviation sector, with cancellations increasing for the third consecutive day.
Major carriers such as United Airlines, Delta, and American Airlines have already announced extensive schedule reductions. United confirmed that it plans to cancel 190 flights on Monday and 269 on Tuesday, while other airlines expect to follow suit. The Federal Aviation Administration has ordered airlines to cut their daily flights by 4 percent starting Friday due to safety concerns related to air-traffic control operations. These reductions are set to escalate to 6 percent by Tuesday and could reach 10 percent by mid-November if conditions do not improve.
As of Sunday afternoon, nearly 2,215 flights had been canceled and more than 7,200 delayed, according to flight-tracking data. Saturday saw another 1,550 cancellations and more than 6,700 delays — an increase from 1,025 cancellations the previous day. Airline officials privately acknowledge that they are struggling to plan future operations because of the uncertainty surrounding staff availability. Many have expressed concern about how the system will function if attrition and retirements continue at their current pace.
Transportation Secretary Duffy confirmed that retirements among controllers have surged since the start of the shutdown. Before October 1, about four controllers retired each day; now, the number has jumped to between 15 and 20 daily. The Federal Aviation Administration estimates that it is short by approximately 1,000 to 2,000 qualified controllers, creating additional safety and scheduling challenges. The situation has now reached a critical point where the agency must balance air safety with operational feasibility — a difficult trade-off at the height of one of the busiest travel seasons of the year.
The immediate impact is already visible. Airlines have reduced staffing at ticket counters, delayed maintenance schedules, and scaled back non-essential routes. Travelers face longer wait times, frequent last-minute cancellations, and fewer rebooking options. Experts warn that if the shutdown continues into mid-November, it could disrupt the entire Thanksgiving travel season and potentially spill over into the Christmas holidays, amplifying losses for the aviation, hospitality, and retail sectors alike.
Economic and Political Fallout Mount as Senate Pushes Toward Possible Deal
The growing disruption in air travel is now being mirrored by increasing political pressure in Washington. Lawmakers in the Senate are reportedly close to negotiating a short-term funding measure that could reopen the government through January 2026, but partisan disagreements over healthcare spending and budget priorities continue to delay progress. Each day the shutdown persists, the economic cost mounts — not only in aviation but also in broader sectors such as manufacturing, logistics, tourism, and retail.
Economic experts note that a shutdown of this duration has both direct and indirect consequences. Federal workers without pay reduce their household spending, businesses dependent on government contracts lose revenue, and investors begin to question the reliability of U.S. fiscal management. According to independent estimates, the shutdown has already cost the economy tens of billions of dollars in lost productivity and delayed projects. Analysts warn that if the deadlock extends past Thanksgiving, consumer demand could contract sharply, further weighing on gross domestic product.
White House economic officials have hinted that the administration is preparing contingency measures to mitigate the immediate impact on essential services, but without congressional approval for new funding, those steps remain limited. Treasury Secretary Scott Bessent acknowledged that the broader economy is “beginning to feel the bite,” as disruptions spread beyond air travel to food assistance programs, infrastructure maintenance, and small-business lending.
Financial markets have also begun to react. Airlines, travel companies, and tourism-related stocks have experienced volatility as investors assess the growing risk of prolonged disruption. Economists believe that even if the shutdown ends soon, the lingering effects on confidence and spending could persist through the end of the year, making a quick rebound unlikely.
Kevin Hassett summarized the situation bluntly: “If this continues, it will not just be a temporary inconvenience. It will hit growth, jobs, and consumer activity at a time when the economy typically sees its strongest quarter.” His assessment reflects growing consensus among policymakers and analysts that the federal shutdown, once seen as a political standoff, has now become a genuine economic threat.
As the holiday season approaches, the stakes are enormous. The airline industry is under pressure to restore operations, consumers are uncertain about travel plans, and the government faces public frustration over stalled negotiations. The coming weeks will determine whether the shutdown remains a temporary disruption or triggers a deeper slowdown — one that could mark the United States’ first negative quarterly growth in several years.
The Information is collected from CBS News and MSN.
