Statewide Iowa — (RI) — With the partial government shutdown in its 35th day, a Midwestern economist says economic growth is slowing and we may be headed for a significant downturn later this year or early in 2020.
Ernie Goss, an economics professor at Creighton University, says the housing industry is “soft” and trade tensions with China are hurting exports, and it’ll eventually hit the gross domestic product, or GDP.
For most states, federal employees make up about one-and-a-half percent of the workforce and about the same amount of the GDP.
Agricultural states like Iowa have already been feeling the effects of the trade troubles with China, and the federal government shutdown isn’t helping matters.
Many farmers who are planning for the spring planting season ahead are wrestling with finances in the uncertain marketplace. Plus, significant statistical information isn’t available from the mostly-closed-U-S-D-A to help strategize spring crops. While there’s never a good time for an economic hiccup or slowdown, Goss says “this is an exceptionally bad time.” He notes, we tend to judge goverment shutdowns by past shutdowns.
The last significant government shutdown for 16 days in October of 2013 showed negative GDP growth in the first quarter of 2014. Goss also points to indirect impacts in the private sector as a ripple effect, saying for every one job pullback in the federal government, there will likely be one more job lost in the private sector.