UPDATE 1-Obama says debt ceiling crisis hurt U.S. economy

(Updates with quotes)

WASHINGTON Aug 3 (Reuters) - The U.S. debt ceiling crisis had an unnecessary negative impact on the economy, President Barack Obama said on Wednesday, while a congressional impasse over aviation could cost the government $1 billion in lost revenues.

Obama signed legislation into law on Tuesday that would raise the U.S. debt ceiling and cut spending, averting a default hours before a deadline.

"The economy is still weakened, partly because of some things we couldn't control like the Japanese earthquake and the situation in Europe as well as the Arab Spring and its effect on oil prices," Obama told reporters at the White House at the beginning of a meeting with his Cabinet on Wednesday.

"Unfortunately the debt ceiling crisis over the last month, I think, has had an unnecessary negative impact on the economy ... as well," he said.

Obama said a disagreement in Congress that has led to a partial shutdown of federal aviation programs was another example of how work in Washington can have an adverse effect on the economy.

He urged lawmakers to settle their differences by the end of the week.

Airlines were collecting fees but not turning them over to the government as a result of the partial shutdown, which could lead to $1 billion in lost revenue, Obama said.

"We don't anticipate it's going to be easy to get that money back," he said.

"Don't let a billion dollars, at a time when we're scrambling for every dollar we can, get left on the table because Congress did not act."

(Reporting by Jeff Mason; Editing by Doina Chiacu)