WASHINGTON (Reuters) -The economic impact of the U.S. government shutdown is far worse than expected, but the U.S. economy is likely to rebound quickly once it ends, White House economic adviser Kevin Hassett said on Friday.

Construction projects are starting to slow down and travel is suffering, Hassett said in an interview with Fox Business Network.

"Travel and leisure is a place that's really being heavily hit right now, and if it continues to get hit, if the air travel thing goes south for another week or two, then you could say that they would have at least a near-term downturn," Hassett said.

Hassett, director of the National Economic Council, stopped short of saying any pocket of the U.S. economy was in recession, not going as far as Treasury Secretary Scott Bessent did last week.

The labor market is a bit softer, in part because of uncertainty caused by the 38-day government shutdown, Hassett said on "Mornings with Maria."

Hassett said he was disappointed after Federal Reserve Chairman Jerome Powell said the Fed could pause interest rates in December.

In remarks to reporters later at the White House, Hassett said he expected the U.S. economy to bounce back quickly once the federal government reopens.