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Photo: Roslan Rahman /AFP/Getty Images

Analysts at the New York Fed expect the all-out production stoppage on Boeing's 737 MAX will have a sizable negative impact on U.S. growth this year.

State of play: The decline will produce a 0.4% decline in GDP growth, the NY Fed's Julian di Giovanni finds.

Why it matters: "This is a significant fall given an average quarterly GDP growth of 2 percent," di Giovanni writes in a recent Fed blog.

Background: Prior to the slowdown in production that began in 2019 after nearly 350 people died in two plane crashes, Boeing was producing roughly 52 of those models on average per month. It's assumed this number will be zero for the first quarter of 2020.

  • Assuming workers' productive capacity, even if they are laid off, is zero, and suppliers are all domestic, di Giovanni applies Hulten’s theorem to the implied percentage change in sales from the 737 MAX production stoppage to calculate the total loss.

By the numbers: "Boeing averaged about $25 billion in quarterly revenue in 2018. Assuming that the average price of a Boeing 737 MAX is roughly $130 million, a pause in all production and sales implies lost revenue of $7 billion per month, or $21 billion for the first quarter of 2020."

  • "This then implies a sales loss of roughly 84 percentage points relative to an average quarter in 2018."
  • "Treating this sales loss as the firm shock, the lost GDP growth is then Boeing’s Domar weight times this loss (0.0047*–0.84 = –0.004), or a 0.4 percentage point decline in GDP growth."

Go deeper: The fallout from Boeing's 737 MAX suspension could have a big impact

Go deeper

Air quality alerts issued as California fires threaten more sequoias

The Windy Fire blazes through the Long Meadow Grove of giant sequoia trees near the Trail of 100 Giants in Sequoia National Forest, near California Hot Springs, on Tuesday. Photo: David McNew/Getty Images

Two wildfires were threatening California's sequoia trees over overnight — hours after authorities issued fresh evacuation orders and warnings, along with air quality alerts.

The big picture: Air quality alerts were issued Wednesday for the Bay Area and the San Joaquin Valley as smoke from the Windy and KNP Complex fires resulted in hazy, "ash-filled" skies from Fresno to Tulare, the Los Angeles Times notes.

Asymptomatic Florida students exposed to COVID no longer have to quarantine

Florida Gov. Ron DeSantis during a September news conference in Viera, Fla. Photo: Paul Hennessy/SOPA Images/LightRocket via Getty Images

Florida Gov. Ron DeSantis (R) announced Wednesday an emergency order allowing parents to decide whether their children should quarantine or stay in school if they're exposed to COVID-19, provided they're asymptomatic.

Why it matters: People infected with COVID-19 can spread the coronavirus starting from two days before they display symptoms, according to the CDC. Quarantine helps prevent the virus' spread.

Federal judge: Florida ban on sanctuary cities racially motivated

Florida Gov. Ron DeSantis. Photo: Joe Raedle/Getty Images

A federal judge on Tuesday struck down parts of a Florida law aimed at banning local governments from establishing sanctuary city policies, arguing in part that the law is racially motivated and that it has the support of hate groups.

Why it matters: In a 110-page ruling issued Tuesday, U.S. District Judge Beth Bloom said the law — signed and championed by Gov. Ron DeSantis (R) — violates the Constitution's Equal Protection Clause because it was adopted with discriminatory motives.