A weekly government shutdown, as suggested by S&P Global's Chief Economist for the USA, Beth Ann Bovino, could dampen the US economy's growth, even if it's of short duration. The shutdown in late 2018 and early 2019, which lasted 35 days, led to a reduction of about 18 billion USD in federal spending and a decrease of 0.2% in GDP for the first quarter of 2019.
Though a deal might be reached by the stock market close on Friday, the government shutdown's consequences will linger for businesses. The direct costs, such as employee time off and unnecessary government workforce employment, will never fully be recouped, according to S&P.
Notably, a prolonged government shutdown could also have indirect costs, like delayed business transactions with the government. Though some indirect costs might be covered, direct costs will remain uncompensated.
Though sources like CNN and S&P Global discuss broader macroeconomic trends, such as debt ceiling debates and their impact on credit ratings, they do not directly tackle the specific economic impact of a week-long government shutdown. More specialized analyses or forecasts focusing on this particular scenario would provide more relevant information.
