It is day 27 of the partial federal government shutdown and economic losses will soon start to add up. There are some estimates that show it will cost the nation’s economy $1.2 billion each week.
Creighton University Economist Ernie Goss says there are other factors to consider as well.
The last government shutdown was in October of 2013. There were 120,000 jobs in the private sector that were lost. Goss says, “We focus a lot on of course the government jobs but for every one lost in the public sector, federal jobs, there is one lost in the private sector. Contractors for example so the costs can really mount up.”
Goss says other examples include hotels, concession stands and restaurants that are located near government buildings, museums, federal sites or national parks. Hotels are having to cut back on worker hours and possibly cutting jobs due to the lack of business. He says the shutdown will end and federal employees now working without a paycheck will be reimbursed. That won’t be the case in the private sector.
Goss says there could be longer term repercussions from the shutdown. This is just part of a very large global economic picture. Goss says, “I think if it continues to go on it will probably push into a recession. Keep in mind this is already on top of housing slowdown. We have had the financial volatility that we’ve seen. We have trade wars going on, at least a trade war with China. We have a global economic slowdown. Then you’ve got “Brexit” in Great Britain which has not been settled. That has some negative impact on the economic outlook. It tends to increase volatility so we will have to wait and see what happens in Great Britain.”
Goss says a lot of economic conflict could be resolved if the shutdown is settled in the next week or so.