Partial shutdown costing U.S. $160M per workday
The partial U.S. government shutdown cost $1.6 billion last week in lost economic output, according to IHS Inc., a Lexington, Mass.-based global market-research firm.
As the showdown continues, the office closures are now draining an average of $160 million each workday from the $15.7-trillion economy.
Two more days of the Washington-made calamity would put the shutdown's financial harm on par with a natural disaster last month. September's heavy rains, flash floods and mudslides across 17 Colorado counties caused at least $2 billion in economic damages, according to Equecat Inc., an Oakland, Calif.-based catastrophe-risk modeler.
Based on the IHS estimate, the shutdown costs will surpass $2 billion Wednesday.
Congress' failure to approve a federal budget or a stopgap spending measure sidelined an estimated 800,000 federal employees last week. As many as 350,000 of those employees returned to work , with regular pay schedules. Active-duty military employees also are collecting checks.
Yet, the economic impact of the shutdown goes beyond the federal workforce. The National Association of Government Contractors found in an Oct. 1 survey of 925 members that 29 percent planned to delay hiring because of the stalemate, and 58 percent said it will have a negative effect on business.
"The behavior of contractors is going to quickly be felt in the spending chain and spread out through the economy broadly," said Joseph Minarik, research director at the Committee for Economic Development in Washington and a former chief economist of the U.S. Office of Management and Budget.
Some defense contractors who planned to furlough employees won a reprieve when the Defense Department returned most of its civilian workforce to the job. That meant some contractors could continue doing federal employee-supervised work and gain access to more government work sites.