Even though the five-week partial government shutdown is over for now, it has cost the economy $11 billion due to lost output from federal workers, delayed government spending and reduced demand. That’s according to an analysis from the nonpartisan Congressional Budget Office released earlier this week which estimated that total delayed federal spending due to the impasse stands at about $18 billion. Taking a closer look at the economic losses, the CBO estimates that GDP in the fourth quarter of 2018 was reduced by $3 billion while in the first quarter of 2019, it is estimated to be $8 billion lower than normal.
The good news is that most of the economic damage is expected to gradually be reversed as federal workers return to their jobs. The bad news is that the shutdown is expected to make the U.S. economy 0.02% smaller than expected in 2019. Even though most of the $11 billion losses will be recovered, an estimated $3 billion has been lost permanently, according to the COB. The record-breaking shutdown kicked off when President Trump demanded $5.7 billion from Congress to fund a stretch of his controversial wall along the border with Mexico. On Friday, the standoff was finally brought to an end when the president announced he had agreed to sign a spending bill to reopen the government through February 15. Notably, that bill contained no funding for the border wall.
Click below to enlarge (charted by Statista)
Economic cost of the government shutdown compared to requested border wall funding.Statista