Shutdown cost 120,000 US jobs: White House
The recent government shutdown and debt default crisis hit the US economy so badly that it cost the country 120,000 jobs and wiped out 0.25 percent of economic growth for the fourth quarter, the White House said.
Washington: The recent government shutdown and debt default crisis hit the US economy so badly that it cost the country 120,000 jobs and wiped out 0.25 percent of economic growth for the fourth quarter, the White House said.
Jason Furman, chairman of the White House Council of Economic Advisers, said the shutdown and threat of default lowered sales, steel production and the number of mortgage applications filed.
He said the council looks at a variety of data, including consumer confidence surveys, sales growth figures and claims for unemployment insurance, to arrive at their number, the Wall Street Journal reported.
The government was shut down for 16 days and reopened on October 17 amid a budget dispute in Washington that injected uncertainty into financial markets.
The shutdown came at a steep cost, as Standard and Poor's estimated the US economy lost up to USD 24 billion.
The White House data took into account information only through October 12, meaning the economic harm could grow once more information is available.
"This all just really underscores how unnecessary and harmful the shutdown and the brinkmanship was for the economy, why it's important to avoid repeating it and instead consider jobs that are adding to growth, not subtracting," Furman said.
The new estimates come as the Labour Department said the US added 148,000 jobs in September, fewer than expected, suggesting that the labour market stumbled heading into the latest budget battles in Washington.
Furman said the White House would release a report with details of the data and how it was calculated.
The White House figures for the drop in economic growth are in line with estimates from economists. Many economists have said the shutdown, and the uncertainty caused by whether the government would have enough money to pay its bills, took about 0.2 percent to 0.26 percent off economic growth.
Scott Anderson, chief economist at Bank of the West, said the White House estimates for job losses are a bit "more aggressive" than he would have thought with a clearer picture emerging when the government releases the jobs report for October, next month.