Economic impact getting ‘worse and worse’: Bessent warns US economy faces deeper hit as shutdown drags on

US Treasury Secretary Scott Bessent on Saturday warned that the economic damage from the ongoing government shutdown is worsening, with the effects spreading across major industries and putting additional pressure on federal finances.

Bessent said the situation was deteriorating “day by day,” as prolonged disruptions have begun to undermine key sectors, delay public spending, and weaken financial stability. Economists have warned that the historic shutdown, already the longest ever, risks eroding confidence among businesses and households unless a resolution is reached soon.

Bessent’s remarks come amid mounting concerns from economists and business groups that the shutdown, now the longest in US history, is hurting consumer confidence, delaying federal payments, and disrupting air travel, food aid, and essential government services.

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“We had a fantastic economy under President Trump the past two quarters, and now there are estimates that the economic growth for this quarter could be cut by as much as half if the shutdown continues."

“I can tell you what we’re not going to do is what happened under the Biden administration, where the administration and the media gaslit everyone and said, oh, you know, there’s a vibe session. You don’t understand how good you have it. And what happened then was we had the worst inflation in 40 or 50 years. You know, 22, 23 percent, but the basket of goods and services for working Americans was up more than 30 percent. And what we’re seeing is we had to stop the increase first."

“Now we are starting to see prices level off and come down. You know, gasoline is down, interest rates are down, some mortgages are down. And I think we are making substantial progress on that. And I think over the coming months and the next year, prices are going to come down."

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In an interview with Fox Business Network, White House economic adviser Kevin Hassett said on Friday said that construction projects are starting to slow down and travel is suffering.

The economic impact of the U.S. government shutdown is far worse than expected, but the U.S. economy is likely to rebound quickly once it ends, he said.

With inputs from agencies