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Prominent economist Mohamed El-Erian is sounding the alarm over the prolonged U.S. Government shutdown, warning that the economic consequences are becoming more severe as the standoff stretches into its 34th day. The Economic Damage ‘Is Intensifying’ On Monday, in a post on X, El-Erian warned that as the shutdown dragged into its fifth week, “the economic damage is intensifying.” His remarks come as several sectors begin to feel the pinch, with ripple effects spreading across the broader economy. The former CEO of PIMCO emphasized that the impact of this shutdown hasn’t been uniform across different quarters of society, noting that it has been “disproportionately hitting hard the more vulnerable segments of the population.” See Also: Trump Tells Republicans To Not Be ‘Weak:’ ‘You Will Rue The Day That You Didn’t Terminate The…’ “Some sectors, like air travel, are facing significant disruptions,” he said, as the delays and disruptions across major U.S. airports continue to mount, with multiple air traffic control centers operating below adequate staffing levels. El-Erian also warned that “the longer this persists, the slower and less complete the bounce-back will be when the shutdown finally ends.” Shutdown Impacting GDP Growth Goldman Sachs economist Alec Phillips echoed similar concerns, warning that the economic toll of the prolonged shutdown was starting to mount. According to Phillips, even as a resolution may soon be approaching, the standoff is likely to cost the U.S. economy more than a full percentage point of growth during the final quarter of 2025, which he said could shave the nation’s GDP growth down to 1%. Economist Justin Wolfers has disagreed with this, saying that the impact of the shutdown may be limited in terms of GDP, noting that it “mostly shifts dollars across quarters,” since most Federal workers do eventually get paid once the government resumes. Wolfers, however, did not share his views on the impact this is set to have on certain critical sectors of the economy, such as air travel. Prediction markets such as Kalshi now peg the median duration of the shutdown at 45.9 days, or until Nov. 15. There is now a 75% chance for it to last beyond 40 days, and a 35% chance that it extends beyond 50. Read More: As Government Shutdown Enters 33rd Day, NYC Officials Warn Of Potential Delays, Ground Stoppage At Newark Airport Photo Courtesy: Rix Pix Photography on Shutterstock.com
