January 18, 2019 / 4:45 PM / a month ago

U.S. government shutdown to shave first-quarter growth, Bank of West says

FILE PHOTO: Construction is seen in downtown Los Angeles, California U.S. November 28, 2017. REUTERS/Lucy Nicholson

SAN FRANCISCO (Reuters) - The U.S. government shutdown, now in its 28th day, could brake economic growth to its slowest pace since Donald Trump became president, as households cut spending amid the uncertainty, Bank of the West economist Scott Anderson said on Friday.

Anderson said he knocked off 0.3 percentage points from his first-quarter growth estimate due to the shutdown, and an additional 0.1 percentage point because of the lingering effects of the fourth-quarter stock slump, leaving him with an estimate of 1.7 percent for the first-quarter gain.

Other economists and even Fed officials who set monetary policy are also seeing significant effects as the shutdown drags on and eats into consumer sentiment.

Reporting by Ann Saphir; Editing by Phil Berlowitz

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