US stoppage: Trump blinked for four reasons

The decision of President Donald Trump to approve an agreement to reopen the federal government for three weeks on Friday was taken in a climate of increasing pressure to end the stalemate.

Here are four reasons in the business world for which the White House has blinkered.

1. The travel industry has been stressed.

Delays at major airports on Friday have highlighted serious problems that have affected airports for weeks.

Problems were attributed to staff shortages as air traffic controllers and screening officers – who have been working unpaid since the December closure began – failed to report for work.

Of the Transportation Safety Administrators, unexpected absences more than doubled from the previous year to more than 7%, with many citing "financial limitations", according to the report. agency.

At the same time, airline executives had warned that a drop in government activity as well as more general concerns about travel were affecting bookings.

Southwest, for example, estimated the closure cost between $ 10 million and $ 15 million in January revenue. He also stated that he was forced to postpone a new service in Hawaii.

2. Washington was in shock.

The 800,000 federal employees affected by the closure may have been able to absorb a missed pay check.

But a second starts to hurt, especially in a country where about 40% of adults would not have the funds to cover an unexpected $ 400 expense.

In the Washington area, where about one in six workers was affected, the shutdown could have cut the region's quarterly economic growth by 2.5% if it were to last until March, according to Frederick Treyz, chief economist. at Regional Economic Models Inc.

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It's in an area that grew by 2.1% in 2017.

Despite the pain, the administration was widely criticized for its lack of sympathy and the problem began to hurt the president's approval ratings.

Commerce Department Secretary Wilbur Ross has sharply criticized Thursday 's comments that cash – strapped households should take out loans.

3. The Fed and the others were "blind".

The shutdown coincided with a critical period for the economy, as contradictory economic signals added to the debate over the Federal Reserve's interest rate hikes this year.

Trump has repeatedly criticized the Fed, warning against a misstep.

But fears of a political error grew more and more, the stalemate preventing the publication of closely monitored statistics, including gross domestic product (GDP), retail sales and housing starts.

"The US economy is turning blind," wrote Robert Shapiro, president of Sonecon LLC for the Brookings Institution this week.

"The fact that reliable measures of recent GDP and its components are not available can only lead to more economic uncertainty as well as poor business decisions."

Meanwhile, future data suggested that closure does not help.

This month, the University of Michigan Consumer Opinion Survey has fallen to its lowest point since the election of US President Donald Trump, in part because of the market shutdown.

A senior White House advisor said this week that the shutdown could lead to zero economic growth this quarter.

And economists had warned that a long period of conflict could cause the United States to recession.

4. More pain was about to appear.

The Trump administration worked hard to protect the general public from the effects of the closure, reminding staff to handle items such as tax returns.

But as the stalemate continued, its impact became more and more difficult to ignore.

The federal judicial system warned that it would run out of funding this month. Food subsidies for low-income families are expected to be exhausted in February.

An increasing number of companies were in limbo, with government cuts ending fishing licenses, approvals for beer and wine labels, and IPOs.

And entrepreneurs who provided services to the agencies concerned were losing more than $ 200 million a day due to the closure, according to Bloomberg News estimates.

Greg Fitzgerald is president of the Information Technology Coalition, a Virginia-based entrepreneur.

On Friday, at a meeting of the Chamber of Commerce, he stated that his company had still not been paid for government work completed in December and that he had had to put 200 of the 350 employees from the company on leave.

"It's real," he says. "There are families who will make considerable sacrifices for something that was not their fault."