The government shutdown cost the US billions of dollars, CBO says
REUTERS/Jonathan Ernst/File Photo
- A partial US government shutdown ended Friday, its 35th day.
- With hundreds of thousands of federal employees furloughed or forced to work without pay, it delayed economic activity.
- About $3 billion in lost gross domestic product won't be recovered, the nonpartisan Congressional Budget Office estimated Monday in a new report.
The longest partial US government shutdown on record that ended Friday cost the US economy billions of dollars as it kept a fourth of federal agencies shuttered for five weeks, the Congressional Budget Office said Monday.
Indirect effects add a degree of uncertainty to the findings and could lead to a more pronounced economic impact in the long run, according to the former Federal Reserve staff economist Ken Kuttner.That means the shutdown will most likely influence monetary policy this year, he said. The Federal Reserve Open Market Committee is expected to leave interest rates unchanged at a two-day policy meeting ending Wednesday and has signaled flexibility going forward."My guess is that this will further strengthen the FOMC's inclination to leave policy 'on hold' for the time being until the dust settles," Kuttner said.
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