Thursday marks the second day of the government shutdown, with each additional day potentially having negative effects on the economy. Goldman Sachs estimates that U.S. gross domestic product (GDP) will fall at an annualized rate of 0.2% for each week of the shutdown. That translates to an economic loss of about $15 billion each week based on current annual GDP of $30.2 trillion, according to The Council of Economic Advisors (CEA).
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The CEA estimates that over 1.9 million federal employees face furloughs or delayed payment when the government is closed. In addition, 43,000 workers face unemployment for each month of the shutdown.
Shutdown Threatens Key Inflation and Labor Data
Shutdowns also delay important economic data. That includes key inflation and labor market measures used by the Fed to decide the federal funds rate.
“It also has implications for decision-making by businesses, as uncertainty tends to lead to lower business investment and higher volatility in financial markets,” said the CEA.
Nonfarm payrolls, which were scheduled to be released on Friday, October 3, will likely be delayed. The Consumer Price Index (CPI), scheduled for October 15, is also at risk of being delayed.
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