October's 16-day government shutdown will cut into fourth-quarter GDP growth by 0.2 to 0.6 percentage points, according to a report released Thursday from the White House Office of Management and Budget. That hit to GDP is in line with many economists' estimates. The shutdown also meant 120,000 fewer private-sector jobs created in the first two weeks of October.
If those projections are correct, it could mean the shutdown delivered a meaningful blow to the national economy. Third-quarter GDP growth was at 2.8 percent, the Commerce Department reported Thursday. Even if that pace holds steady through the fourth quarter, it could mean that the shutdown brought moderate economic growth down to more sluggish levels.
Likewise, a subtraction of 120,000 private-sector jobs could bring October job growth to a crawl. September's job growth was only at 148,000, and average monthly job growth for 2013 is at roughly 178,000. However, consensus estimates for private job growth in October stand at 128,000, according to Bloomberg. More data on how the shutdown affected the October jobs numbers will come Friday morning, when the Labor Department releases the October employment report.
The White House also estimates it paid $2 billion to furloughed employees for their days off the job, and that the total compensation bill, including benefits like health insurance, came to $2.5 billion.
OMB Director Sylvia Mathews Burwell told reporters in a Thursday afternoon conference call that those estimates are "conservative."
"It does not represent the total cost, because the other thing it does not cover is all the preparation leading up to and what happened post [shutdown]," she said.
Though the OMB report contains a few pages of economic indicators, it also includes nearly 20 pages detailing programs that were disrupted during the shutdown. Patients were prevented from enrolling in NIH studies, for example, and the shutdown also will delay the 2014 tax filing season by up to two weeks.
For that reason, the OMB report may serve as a political document in addition to a tally of economic impacts. The White House blamed Republicans for the shutdown, and highlighting the shutdown's ill effects – particularly in a weak heavy with economic data – could be a way of reminding the public of its shutdown-related woes as another potential budget fight looms. The deal reached to end the shutdown will fund the federal government through Jan. 15, 2014.
For its part, the White House says it hopes the American people will take away from the report a greater sense of the "negative ramifications" of the shutdown on their lives. Those ramifications include economic consequences and how the shutdown affected their daily lives, but also "the negative impacts on something we're all trying to do, which is run the government more efficiently and effectively," Mathews Burwell added.