White House re-evaluates economic effect of government shutdown

By White HouseFOXBusiness

Republican Party still united behind Trump over border wall funding despite partial government shutdown?

Sen. Mike Braun, (R-Ind.), on the partial government shutdown over funding for a border wall and efforts to get more business leaders involved in politics.

The White House doubled its estimate of the economic effects of the partial government shutdown, which is officially the longest in U.S. history.

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Originally, the Trump administration forecast the partial shutdown would subtract about 0.1 percentage point from growth every two weeks. But a White House official on Tuesday said the administration is now forecasting about 0.13 percent point per week.


If the shutdown lasts an entire quarter, that means the White House anticipates the GDP would shrink by about 1.69 percent. GDPNow, an up-to-date tracker monitored by the Federal Reserve Bank of Atlanta, is estimating fourth-quarter growth of 2.8 percent (as of Jan. 10).

The higher estimate is a result of additional losses from private contractors.

“That includes the effect of work not done by 380,000 furloughed Federal workers (0.08 p.p. per week) plus the work not done by Federal contractors (0.05 p.p. per week),” the official said.

The shutdown, which began on Dec. 22, extended into its 25th day on Tuesday with no end in sight, as congressional leaders and President Trump remain at an impasse over how much funding to grand to a wall along the U.S.-Mexico border.


FOX Business' Blake Burman contributed to this report. 

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