
"What is the current shutdown's expected economic impact? The CBO estimate says the federal spending delay will produce short-term economic losses - largely in the fourth quarter of 2025 - that will mostly be recouped during the first quarter of 2026, assuming the shutdown ends by then. CBO projected how much the shutdown would hamper U.S. economic growth per quarter, adjusted for inflation and multiplied by four, to convert a quarterly figure into an annual one."
"It estimated that a four-week shutdown would reduce fourth-quarter 2025 growth by 1% and an eight-week shutdown would reduce fourth-quarter growth by 2%. Most of this lost growth, CBO said, would be made up in the first quarter of 2026 - but not all of it. Between $7 billion and $14 billion would be permanently lost, depending on how long the shutdown lasts."
A monthlong federal shutdown reduces economic activity, directly affecting unpaid government workers and food aid recipients. The Congressional Budget Office projects short-term losses concentrated in the fourth quarter of 2025, with most output recouped in the first quarter of 2026 if the shutdown ends. CBO estimates a four-week shutdown would cut fourth-quarter growth by 1% and an eight-week shutdown by 2%, leaving $7 billion to $14 billion permanently lost depending on duration. Much of the permanent loss would come from reduced output by furloughed employees. CBO assumptions could understate the full economic effect.
Read at Poynter
Unable to calculate read time
Collection
[
|
...
]