Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Market
Government Shutdown Costs Estimated At $12B-$24B
WASHINGTON (10/21/13)--Cost estimates of the federal shutdown to the economy--in terms of lost productivity and sales--range from $12 billion to $24 billion (The Federal Times Oct. 18), with some predictions indicating that the most deleterious effects of the dysfunction could be yet to come.

The $24 billion figure came from a report by Standard & Poor's. The analysis also predicts that the shutdown will see fourth quarter growth shrink to 2.4%, down from the 3% prediction that the ratings agency issued before the impasse (CNNMoney Oct. 16).
 
Moody's analytics reported that the shuttering of federal offices that handle mortgages, small business loans and other permits coupled with disruption to the tourism industry will cost the economy about $7 billion in the fourth quarter.
 
Economists expect consumer activity in the coming weeks to be buoyed by back pay for federal workers. But Beth Ann Bovino, lead U.S. economist at Standard & Poor's, said that could be eroded by the impending budget negotiations and debt ceiling negotiations in Congress, which must take place in January and February to avoid a potential shutdown and default, respectively.

Contractors who were furloughed won't receive mandated back pay, either.
 
Raising fears of yet unseen damage done by the shutdown, the Bloomberg Consumer Comfort Index, a metric of consumer expectations, was at its lowest since November 2011, and indicated that the share of people predicting a worsening economy increased most dramatically since the collapse of Lehman Bros.--an event that led to the worldwide financial crisis in the fall of 2008 (Bloomberg.com Oct. 17).


RSS print
News Now LiveWire
Social media use helps CUs establish credibility/authenticity says Amaia Stecker, @CUNA sr. social media media mangr. http://t.co/wWAPeDe7UW
30 minutes ago
#creditunion affinity card programs make the grade for schools See #NewsNow http://t.co/TThZIvMRTO
14 hours ago
Home-price appreciation softens further in July #NewsNow #Market http://t.co/0MXVy9sby0
15 hours ago
.@ChartwayFCU charitable arm, the We Promise Foundation, has reached the $1M fundraising milestone in a single year for the first time
16 hours ago
.@mncreditunions' Mark Cummins shares CU difference with @KIMTNews3 http://t.co/gkarhZxDRF
17 hours ago