Financial ratings agency Standard & Poor's reported this week the 16-day U.S. government shutdown costs delivered a massive $24 billion hit to the U.S. economy.
Standard & Poor's said the shutdown equaled some $1.5 billion a day and "shaved at least 0.6% off annualized fourth quarter 2013 GDP growth." Moody's Analytics reported similar numbers, saying the shutdown cost $1.4375 billion per day, for a $23 billion wallop to U.S. gross domestic product.
"The bottom line is the government shutdown has hurt the U.S. economy," Standard & Poor's said in a statement. "In September, we expected 3% annualized growth in the fourth quarter because we thought politicians would have learned from 2011 and taken steps to avoid things like a government shutdown and the possibility of a sovereign default. Since our forecast didn't hold, we now have to lower our fourth-quarter growth estimate to closer to 2%."
How the Full Government Shutdown Cost Was Tabulated
The tab from the government shutdown includes lost wages, lost productivity, and the ripple effects that followed. Here's how the direct and indirect costs added up, according to a report released late last week from the Office of Management and Budget (OMB):
- The shutdown cost national parks and museums $500 million in admission fees and concession stand sales. But the financial impact went much further. Some 700,00 people visit parks every day in a typical October, and communities surrounding the nation' s 401 national parks see about $76 million a day in total visitor spending that is lost during a government shutdown, according to the National Park Service.
- According to the U.S. Travel Association, $152 million per day, or $2.4 billion, in spending related to travel was forfeited over the 16-day shutdown. In Washington, D.C., alone, there was a 9% decrease in hotel occupancy during the first week of the October shutdown, according to the official tourism corporation of D.C, Destination D.C.
- Government permit offices across the country stopped collecting fees, government contractors stopped receiving checks, and critical research projects ceased. Several military contractors remain in limbo as uncertainty lingers about big projects.
- Most furloughed workers, in effect, got a paid vacation. Most received back pay for time lost during the standstill. In addition, many will likely pocket overtime pay as some agencies rush work that didn't get done over the two-week closure.