Economic growth was expected to slow in 2019 in any case, but Trump's ongoing government shutdown may hasten the decline.
Economists surveyed by the Wall Street Journal have reduced their projections for first quarter growth and their projections will likely change again unless the shutdown ends soon.
Economists estimate the furlough of 380,000 federal workers—meaning they take unpaid leave—costs $1 billion to $2 billion a week in lost economic output. That is a rounding error in an economy that produces about $20 trillion in goods and services a year, but it accumulates over time. An additional 420,000 federal workers, deemed “essential,” are working without pay.
The lost output will, to this point, shave between a tenth and a quarter of a percentage point off the economy’s annual growth rate in the first quarter, private-sector economists said. J.P. Morgan projects gross domestic product to grow at a 2% pace this quarter, while Moody’s projects about 2.6% growth. Macroeconomic Advisers expects 1.6% growth.
Whether the economy grows at a rate of 1.6 or 2.6 percent in the first quarter of 2019 -- or somewhere in between -- that would be significantly less than the 3.1 percent growth seen in the first quarter of 2018.
All of these estimates are subject to change because we still don't know how long Trump's shutdown is going to last. We don't know how much longer Senate Majority Leader Mitch McConnell will refuse to hold a vote on a bill to reopen the government.
There's no end in sight right now.