The U.S. economy will get a boost when Boeing’s troubled 737 Max jets return to flight, Commerce Secretary Wilbur Ross told CNBC on Wednesday.
“Take for example the most recent quarter, Boeing’s problems with 737 Max probably took something like 0.4%” off gross domestic product, Ross said. “That will come back when the 737 Max problems are ultimately fixed.”
U.S. growth slowed in the second quarter, with GDP advancing 2.1% compared to the first-quarter’s 3.1% gain.
The 737 Max fleet has been grounded across the globe since mid-March following two crashes over less than five months that killed 346 people combined. Investigators blamed a software problem in the plane’s anti-stall automated flight system.
Last month, Boeing reported a $2.9 billion second-quarter loss, its worst quarterly loss ever, due to the Max problems.
Shortly after the grounding, analysts began to predict that Boeing’s troubles would harm overall U.S. economic growth. Wells Fargo in April projected a 0.2% reduction in second-quarter GDP. Last month, J.P. Morgan estimated the groundings and subsequent production cuts would trim second-quarter economic growth by about 0.1%.
The 737 Max grounding, now in its sixth month, has also hit suppliers. General Electric said last month its cash flow took a hit as a result. GE, which makes the Max engines through a joint venture, said it would continue to report losses as long as the model remained grounded.
Boeing, which has been testing software fixes, expects the Max jets to return to the skies by early in the fourth quarter.
Once that happens, Ross said, the U.S. economy will even out. “We think that the economy is strong, the economy is headed in a good direction,” he added, saying he believes the U.S. can work its way to 3% growth.