"About 1.25 million federal workers haven't been paid since October 1. Thousands of flights have been canceled, a trend that is expected to continue this week even as Congress moves toward reopening the government. Government contract awards have slowed and some food aid recipients have seen their benefits interrupted. Most of the lost economic activity will be recovered when the government reopens, as federal workers will receive back pay. But some canceled flights won't be retaken, missed restaurant meals won't be made up,"
"The Congressional Budget Office (CBO) estimated that a six-week shutdown will reduce growth in this year's fourth quarter by about 1.5 percentage points. That would cut growth by half from the third quarter. The reopening should boost first-quarter growth next year by 2.2 percentage points, the CBO projected, but about $11 billion in economic activity will be permanently lost."
""Short-lived shutdowns are usually invisible in the data, but this one will leave a lasting mark," Gregory Daco, chief economist at accounting giant EY said, "both because of its record length and the growing disruptions to welfare programs and travel.""
About 1.25 million federal workers went unpaid beginning October 1; about 650,000 federal employees did not work during the shutdown. Thousands of flights were canceled and cancellations are expected to continue even as the government reopens. Government contract awards slowed and some food aid recipients experienced interrupted benefits. Most lost economic activity will be recovered through back pay, but some travel, restaurant spending and postponed purchases will not be recouped, creating permanent losses near $11 billion. The CBO estimated the shutdown would cut fourth-quarter growth by about 1.5 percentage points and boost first-quarter growth next year by roughly 2.2 percentage points. The shutdown compounds sluggish hiring, elevated inflation, and tariff-related uncertainty, though few economists expect a recession.
#government-shutdown #economic-growth-impact #federal-workers-unpaid #travel-and-welfare-disruptions
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