U.S. averts default but shutdown took $24 billion chunk out of economy
NEW YORK (CNNMoney) The United States may have dodged an economic catastrophe by raising the debt ceiling and opening the government, but it didn’t emerge from the political debacle unscathed.
The 16-day government shutdown took a $24 billion chunk out of the U.S. economy, according to an initial analysis from Standard & Poor’s.
As a result, the rating agency projects that the U.S. economy will grow 2.4% in the fourth quarter — as opposed to the roughly 3% growth rate predicted prior to the shutdown.
“Because it’s happening all at once, so quick, so fast, unplanned; it’s going to hurt,” said Beth Ann Bovino, U.S. chief economist at S&P. “We can absorb it, but it still hurts.”
Hundreds of thousands of federal workers were furloughed during the shutdown, but that was just one of the widespread effects of the first shutdown in nearly two decades.
Federal contractors also furloughed thousands of employees.