Shutdown Cost U.S. Economy $11 Billion

The 35-day partial government shutdown cost the U.S. economy $11 billion, and some $3 billion of that total will never be recovered, the Congressional Budget Office said Monday.

The nonpartisan office estimated that the shutdown delayed about $18 billion dollars in federal spending, resulting in the reduction of real GDP by $3 billion in the fourth fiscal quarter of 2018 and $8 billion in the first quarter of this year. The office said that GDP will tick up higher than normal in subsequent quarters as the delayed spending trickles through the economy.

Some 800,000 federal workers were forced to work without pay or were put on temporary unpaid leave during the shutdown.

“The shutdown dampened economic activity mainly because of the loss of furloughed federal workers’ contribution to GDP, the delay in federal spending on goods and services, and the reduction in aggregate demand (which thereby dampened private-sector activity),” the office said in a report.

Some shutdown costs, however, are harder to quantify, the office said. The estimates do not include more indirect negative effects of the shutdown, like the inability of businesses to obtain federal permits or difficulties accessing federal loans – factors that were likely beginning to lead organizations to postpone hiring and investment decisions, the office said.

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