Shutdown Cost U.S. Economy $11 Billion, C.B.O. Says

WASHINGTON — The five-week federal government shutdown cost the United States economy $11 billion, with nearly a quarter of that total permanently lost, the Congressional Budget Office said on Monday.

The nonpartisan C.B.O. said that the shutdown, which started in late December and ended last Friday, delayed $18 billion in spending by federal workers. That is expected to reduce 2018 fourth quarter gross domestic product by $3 billion and cut first quarter growth this year by $8 billion, or 0.2 percent.

The C.B.O. said that growth in subsequent quarters will be higher as that delayed spending takes place and filters through the economy. However, it estimates that $3 billion will never be recovered.

The most direct hit to the economy came from the loss of spending by furloughed workers, as well as the delay in federal spending on goods and services and reduced aggregate demand, C.B.O. said.

But the economy also suffered “more indirect negative effects,” which are harder to quantify but stemmed from businesses being unable to obtain permits and certifications and reduced access to federal-backed loans.

“Such factors were probably beginning to lead firms to postpone investment and hiring decisions,” C.B.O. said.

While the shutdown officially ended on Friday, it is only a temporary three-week reprieve. President Trump has warned the government could shut down again if there is Congress does not agree to his $5.7 billion request for funds to build a wall along the border with Mexico.

White House officials had warned that the economy could have zero growth in the first quarter if the shutdown dragged on.

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