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US shutdown cost $2.0 billion in lost govt output

Update: November, 08/2013 - 11:36

WASHINGTON – The 16-day US government shutdown cost 6.6 million in lost workdays for furloughed federal workers, amounting to US$2.0 billion in lost productivity, the White House said on Thursday in a report.

The Office of Management and Budget survey charted the deep and wide impact of the shutdown across the economy, ranging from delays in approving home loans, missed food safety inspections and a delayed fishing season in the Alaskan crab grounds.

The report was published as the White House steps up warnings that fourth quarter economic growth will be hard hit by the shutdown, caused when Congress failed to agree on a government operating budget by October 1.

It also came before the release of the latest monthly employment report by the Labour Department on Friday, which could show a slowdown in job creation due to the government closure and uncertainty over a near debt default caused by a political meltdown between Republican lawmakers and the White House.

"Federal government employees were furloughed for a combined total of 6.6 million days, more than during any previous Federal government shutdown," the report said.

Since employees were paid after the government went back to work in mid-October after a compromise was worked out between the White House and Republicans in Congress, the government was forced to pay its workforce for work that was never performed.

"We estimate that the total cost of pay for furloughed Federal employees during the period of the shutdown is roughly $2.0 billion," the report said.

The shutdown was the second longest since 1980 and the most significant on record, measured in terms of employee furlough days, the report said.

The survey reiterated previous estimates by the White House and outside experts that the shutdown could reduce fourth quarter GDP by 0.2-0.6 percentage points and may have meant that 120,000 fewer private-sector jobs were created during the first two weeks of October. -- AFP

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