35-Day Government Shutdown Cost the U.S. Economy $3 Billion in Permanent Losses
The 35-day government shutdown cost the U.S. economy $11 billion, of which $3 billion isn’t likely to be recovered.
That’s according to a new report from the Congressional Budget Office.
The $8 billion that should be recouped comes from the government reopening and federal workers receiving back pay, the CBO said.
In total, losses amount to a 0.1% reduction in GDP in the fourth quarter of 2018 and 0.2% in the first quarter of 2019. The CBO estimates the lasting economic effects of the shutdown will cause the 2019 level of GDP—the value of all U.S. goods and services— to be 0.02% smaller than it would have been otherwise.
Going forward, the shutdown has lowered the expected annualized economic growth rate by 0.4% in the first quarter of 2019, according to CBO estimates. In the fourth quarter of 2018, the shutdown decreased that rate by 0.2%.
The most negatively affected? Federal workers who went weeks without pay and private sector companies that lost business, amounting to permanently foregone income. The CBO’s calculated losses also don’t include the indirect negative effects the CBO was unable to quantify.