Government Shutdown Cost 120,000 Jobs In Two Weeks, Report Says

| by Sarah Fruchtnicht

The government shutdown over Obamacare and raising the debt the ceiling cost about 120,000 private sector jobs in just two weeks, according to a report from the White House’s Council of Economic Advisers (CEA).

Average monthly job growth in 2013 has been 182,000.

Head of the CEA, Jason Furman, said the 16-day shutdown cost 0.25 percentage point from fourth-quarter economic growth in the fourth quarter of 2013.

The report said its figures “could understate the full economic effects of the episode to the degree it continues to have an effect past October 12th.”

Since the data only covers the first 12 days of October, Furman says the figures “could potentially get worse.”

Russell Price, senior economist at Ameriprise Financial Inc., said he thinks the shutdown wil shave a total of 0.5 percentage point from the fourth-quarter gross.

The CEA report looked at actual economic performance during the 12 days and took into account secondary effects like impact on the private sector and the loss of business and consumer confidence.

Other reports put a giant pricetag on the shutdown. IHS, Inc. estimated the economy lost $300 million a day during the shutdown. Standard & Poor’s reported that the shutdown cost a total of $24 billion – the same amount it would cost to fund a year of Head Start, the Children’s Health Insurance Program (CHIP), and the Women Infants and Children (WIC) combined, ThinkProgress reported.

Price warned that if lawmakers failed to meet the next deadline, they will risk the economy all over again.

“When that news hits that they’re still not able to find a conciliatory budget, that could further impact the holiday spending season,” Price told Bloomberg

Sources: Bloomberg, ThinkProgress