Trump Administration Economists Double Estimates Of Shutdown Costs

Yesterday, President Donald Trump’ economic advisers more than doubled their estimate of the damage to the U.S. economy by the shutdown of parts of the U.S. government affecting some 800,000 federal workers. The Council of Economic Advisers now calculates the shutdown cuts quarterly GDP growth by 0.13 percentage points for every week it lasts, CEA chair Kevin Hassett told the New York Times. The CEA had originally calculated a 0.1 percentage point ding to the economy for every two weeks that the shutdown continued. The latest calculation says the economy has lost about 0.5 of a percentage point in growth since it began on December 22.

It’s not clear how permanent the loss might be since although Federal workers will receive retroactive pay once the government reopens–or at least they have in past shutdowns–contract workers employed by the federal government who have been furloughed are unlikely to get pay for missed work.