Economy takes a hit from government shutdown
Oct. 18, 2013 – Federal workers reported back to work yesterday following a 16-day furlough due to the recent shutdown, but repercussions from the saga have hurt the nation’s economy, according to reports.
This shutdown cost the economy $24 billion and cut 0.6 percent off the nation’s economic growth, according to new analysis from Standard & Poor’s, reported by The Hill’s Finance and Economy blog. Furthermore, S&P noted that since this government funding bill only runs through Jan. 15 and the borrowing authority through Feb. 7, the congressional fight that has just concluded over fiscal issues could happen again in the not-so-distant future.
Bloomberg reported that Macroeconomic Advisers LLC said the recurring budget battles in Washington have lowered U.S. economic growth by about 0.3 percentage points a year since 2009. The report also said budget woes have added more than a half-point to this year’s unemployment rate, comparable to about 900,000 jobs.
NAFCU Director of Research and Chief Economist David Carrier said that while a significant impact from the government shutdown is being felt now, what takes place next year could be worse. “There’s an immediate hit from what happened in the last month, but if Congress doesn’t work out their differences over the budget next year, the effects could be worse,” he said. The CBO estimates that the next round of sequestration will cost 800,000 jobs in 2014.
The Hill article