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What to Expect From a Government Shutdown

“Morgan Stanley’s chief U.S. economist Vincent Reinhart published a brief note minutes after the U.S. government shutdown went into effect.

“Dysfunction is not new, in that this marks the seventeenth shutdown in the past forty years,” wrote Reinhart. “About 800,000 government workers will stay home, as federal employees who cannot be paid should not work.”

Here’s the key takeaway from the note:

In addition to finger pointing to assign blame, expect:

  • A 15 basis point drag on fourth-quarter real GDP growth, at an annual rate, for every week of shutdown as those furloughed workers do not put in their usual hours;
  • Most data releases to be delayed…”

Full article 

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