US economy likely to pick up, though pain may linger for some

President Donald Trump. Photo / AP

The US economy will likely resume its steady growth now that the Government has reopened, though economists say some scars - for the nation and for federal workers - will take time to heal.

Most analysts say the 35-day partial shutdown pared a few tenths of a percentage point from annual economic growth in the first three months of 2019. They say growth should pick up soon, though some of the money federal workers and contractors didn't spend in the past five weeks - on items such as movie tickets, restaurants and travel - would never be made up. Having gone without two pay cheques, many federal workers had to visit food banks or borrow money. Federal workers will receive backpay, but some contractors may not.

President Donald Trump agreed to reopen the Government for three weeks after having forced the shutdown in hopes of compelling Democrats to approve billions for a wall on the Mexico border. Trump failed to secure any such money.

During the shutdown, a shortage of airport security and air traffic controllers disrupted travel at major hubs such as LaGuardia Airport in New York and Newark Liberty International Airport in New Jersey.

The pressure on Trump intensified on Saturday after a delay of about 3000 flights by mid-afternoon because six of 13 air traffic controllers didn't show up to work at a critical centre in Virginia.

S&P Global Ratings estimates the economy lost US$6 billion ($8.7b) because of the Government closure - a sizeable but relatively negligible sum in a US$19 trillion-plus economy.

"If the shutdown had lasted much longer, the economic impacts would have snowballed - travel problems, tax refunds etc," said Stephen Stanley, chief economist at Amherst Pierpont Securities.

Still, the damage isn't likely to lift immediately. And some federal employees have expressed anxiety about job stability and security. The most skilled or talented may be most likely to leave, a potential problem for an economy already facing worker shortages in some areas.

Job searches by employees at federal agencies jumped during the shutdown, according to jobs site Indeed.

Employees who had gone unpaid at the Department of Homeland Security, Census Bureau, the IRS and the Transportation Safety Administration were much more likely to be hunting for a new job compared with the past two years of searches.

If Trump shuts down again after the agreement lapses on February 15 it will hit the economy, says Mark Zandi, of Moody's Analytics: "It would wipe out confidence."

- AP