The Longer It Lasts, the More a Shutdown Could Hurt the Economy
A separate report from the Bureau of Economic Analysis, part of a larger analysis by the Congressional Research Service, found
that lost hours worked by federal employees over the two weeks of the shutdown in 2013 accounted for a 0.3 percentage point drop in quarterly growth — by themselves.
As a whole, shutdowns cost the economy at least 0.1 percentage point of growth per week,
and probably much more, the Congressional Research Service surmised in a report in 2014.
“A shutdown affects not only Washington and its employees,
but also has ripple effects across sectors throughout the country — from shopping malls to national parks, from contractors to hotels,” said Beth Ann Bovino, chief United States economist at S.&P.
President Trump’s Council of Economic Advisers estimates
that every week of furloughing federal workers would reduce annual economic growth by 0.2 percentage point.
The longer the government is shut down, the bigger the economic impact — and this time, the bigger the chances
that the economy’s recent growth spurt could stall, at least temporarily.
A 16-day shutdown in October 2013, for example, may have cost $20 billion in output, cutting 0.5 percentage point
off the annualized economic growth rate in the fourth quarter, according to the securities rating firm Moody’s.
“We face a very real risk of a national hiring hesitation, with recruiters putting plans on hold,
and job movers opting to sit tight for the foreseeable future,” said Doug Monro, a founder of the global job search engine Adzuna.