The U.S. federal government is on the brink of a potential shutdown at a precarious time for the economy, with a hiring slowdown fueling recession concerns and persistent inflation complicating the Federal Reserve’s efforts. Fed Chair Jerome Powell has described the current period as „turbulent,” emphasizing the challenges policymakers face. While government shutdowns typically cause modest economic damage—mainly through furloughed workers losing pay and reducing consumer spending—the impact could be more severe this time due to the economy’s fragility. A prolonged shutdown could strain an already wobbly economy and hinder policymakers by delaying key economic data releases, making it harder to steer monetary and fiscal responses effectively.
A government shutdown would directly affect economic growth, with each week reducing annualized real GDP growth by about 0.1% in the quarter, according to Moody’s Analytics. Although past shutdowns have averaged just eight days, the 2018 shutdown lasted 35 days, highlighting the risk of extended disruptions. Furloughs of non-essential federal workers—potentially hundreds of thousands—and threats of permanent firings could amplify economic losses, as back pay typically helps recovery but may not apply if jobs are cut. Essential services like defense and Social Security would continue, but the erosion of consumer sentiment during shutdowns poses additional risks, given that consumer spending drives about 70% of the economy.
The absence of critical federal data, such as the monthly jobs report, during a shutdown would further complicate the Fed’s delicate balancing act between controlling inflation and supporting employment. Despite historical resilience in stock markets during shutdowns, the current economic fragility means any disruption could have outsized effects. Experts warn that while a short shutdown might yield minimal damage, a prolonged one could significantly dampen growth and confidence, underscoring the urgency for congressional leaders to reach a funding agreement and avert further economic instability.
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Forrás: https://abcnews.go.com/Business/government-shutdown-hurt-economy-experts-explain/story?id=126038221.