"In CBO's assessment, the shutdown will delay federal spending and have a negative effect on the economy that will mostly, but not entirely, reverse once the shutdown ends. The effects of the shutdown on the economy are uncertain. Those effects depend on decisions made by the administration throughout the shutdown. In addition, how federal employees and contractors respond to the delay in compensation is uncertain, Swagel added."
"According to the CBO report, economic activity at the end of 2025 will be lower as a result of the shutdown, with the decline being driven by three factors: fewer services will be provided by federal workers, federal spending on goods, services and food benefits will be temporarily lower and a drop in overall demand will temporarily decrease production from the private sector."
Congressional Budget Office estimates place the economic cost of the federal government shutdown between $7 billion and $14 billion. The shutdown is projected to reduce US GDP by one to two percentage points in the fourth quarter of 2025. Economic activity at the end of 2025 will be lower due to fewer services from federal workers, temporarily lower federal spending on goods, services and food benefits, and a drop in overall demand that reduces private-sector production. The economic effects are uncertain and depend on administration decisions and how federal employees and contractors respond to delayed compensation. If the government reopens this week, total GDP loss by the end of 2026 would be $7 billion.
Read at www.theguardian.com
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