LEILA FADEL, HOST:
Now that the government shutdown is over, the damage assessments have begun.
STEVE INSKEEP, HOST:
Federal workers missed paychecks. Many people missed flights. Millions missed payments to help them buy food. Gradually, all that is now being corrected. But what are the lasting economic costs?
FADEL: NPR's Scott Horsley joins us now to help tally it up. Good morning, Scott.
SCOTT HORSLEY, BYLINE: Good morning.
FADEL: OK, so this was the longest government shutdown on record. Is it also the most costly?
HORSLEY: Almost certainly. Kevin Hassett, who directs the National Economic Council, told the Economic Club of Washington this week the bill will likely be in the neighborhood of $90 billion.
FADEL: Wow.
(SOUNDBITE OF ARCHIVED RECORDING)
KEVIN HASSETT: Our estimate in the White House is that each week that we were shut down is worth about $15 billion off of GDP. I think the Goldman guys have added all that up and guessed that it's between 1% and 1.5% reduction in the growth rate of GDP this quarter.
HORSLEY: Now, some of that economic activity is not really lost. It's just postponed. Government workers who put off a big purchase during the shutdown might go out and spend that money once they get their back pay. But some of it won't be made up. You know, if you skipped a haircut during the shutdown, you're probably not going to get two haircuts to make up for it. Airlines are not going to recover all the money they lost.
FADEL: Yeah.
HORSLEY: So while some of the drop in GDP is merely a timing shift, some of it is gone for good.
FADEL: And what about jobs? What's been the effect?
HORSLEY: Well, we don't have a good read on that. The government's monthly jobs tally was delayed by the shutdown, along with a lot of other government economic data. We should get the September jobs report pretty soon. That was almost finished when the shutdown began. But when it comes to the October report on both jobs and inflation, the government is really starting from scratch, and so it could take some time to reconstruct those. In fact, White House spokeswoman Karoline Leavitt suggested this week the reports may never come out.
(SOUNDBITE OF ARCHIVED RECORDING)
KAROLINE LEAVITT: The Democrats may have permanently damaged the federal statistical system with October CPI and jobs reports likely never being released. And all of that economic data released will be permanently impaired, leaving our policymakers at the Fed flying blind at a critical period.
HORSLEY: Now, after previous government shutdowns, a lot of economic reports were late coming out. But the government has never skipped issuing a major economic report altogether. And most of the experts I talked to think the number crunchers will try very hard to avoid that this time. The Bureau of Labor Statistics, which compiles both the jobs and inflation reports, put a note on its website yesterday saying it's assessing the situation and will issue an updated release schedule soon. And the bureau also thanked people for their patience.
FADEL: Is the Fed, though, really flying blind here?
HORSLEY: No, although certainly its visibility is not as good as policymakers would like. During the shutdown, the Fed and others looked to other sources of information about the job market and prices. And while that's not as good as the missing government data, Fed Chairman Jerome Powell says he thinks he and his colleagues would know if there were a sudden shift in the economy. The Fed holds its next interest rate meeting in a little less than four weeks, and by that time we may have some additional government data. But, you know, unless the numbers are really clear-cut one way or another, it could still be a close call. Right now, markets think it's pretty much a coin toss whether the Fed keeps cutting interest rates by another quarter point in December or takes a break and holds rates steady.
FADEL: NPR's Scott Horsley. Thank you, Scott.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
