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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

The new Washington

Illustration: Sarah Grillo/Axios

The Axios subject-matter experts brief you on the incoming administration's plans and team.

Rep. Lou Correa tests positive for COVID-19

Lou Correa. Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images

Rep. Lou Correa (D-Calif.) announced on Saturday that he has tested positive for the coronavirus.

Why it matters: Correa is the latest Democratic lawmaker to share his positive test results after last week's deadly Capitol riot. Correa did not shelter in the designated safe zone with his congressional colleagues during the siege, per a spokesperson, instead staying outside to help Capitol Police.

Far-right figure "Baked Alaska" arrested for involvement in Capitol siege

Photo: Shay Horse/NurPhoto via Getty Images

The FBI arrested far-right media figure Tim Gionet, known as "Baked Alaska," on Saturday for his involvement in last week's Capitol riot, according to a statement of facts filed in the U.S. District Court in the District of Columbia.

The state of play: Gionet was arrested in Houston on charges related to disorderly or disruptive conduct on the Capitol grounds or in any of the Capitol buildings with the intent to impede, disrupt, or disturb the orderly conduct of a session, per AP.