The government shutdown has cost the economy $11B

U.S. Economy Permanently Lost $3B From Shutdown, CBO Finds

"Growth in business fixed investment, which contributed nearly one-third of the GDP growth in 2018, is expected to slow markedly this year as the effects of the 2017 tax act on investment moderate", CBO's report states.

The longest partial U.S. government shutdown on record that ended Friday cost the U.S. economy billions of dollars as it kept a fourth of federal agencies shuttered for five weeks, the Congressional Budget Office said Monday.

It predicts that the economy will grow by 2.3 per cent this year, a slowdown from 3.1 per cent last year.

The partial shutdown of the United States government is estimated to have cost the USA economy $3bn (£2.3bn).

The impasse delayed about $18 billion in federal discretionary spending, the non-partisan arm of Congress said Monday in a report on the shutdown. Some 800,000 federal workers were forced to work without pay or were put on temporary unpaid leave during the shutdown.

With public services including aviation safety beginning to buckle under the strain of withheld wages and suspended operations, Trump agreed Friday to reopen the federal government temporarily but with no additional funding for the wall.

While the CBO estimated that the US economy will recover $8 billion as business activity resumes and workers are paid, some $3 billion in lost economic activity will never be recovered. Opposition Democrats, however, have refused his demand for border wall money while saying they are willing to offer more funding for other security measures, including tightened controls at ports of entry, more border agents and increased use of technology to monitor illegal border crossings. Of course, this prediction is based on the assumption that the federal government will not shut down for a second time on February 15.

"Underlying those effects on the overall economy are much more significant effects on individual businesses and workers", the report said.

As a result, the nation's gross domestic product will be about 0.2 percentage points lower for the fourth quarter of 2018 and 0.4 percentage points lower during the first quarter of 2019 than it would have been, although part of that will be recouped later in the year.

U.S. President Donald Trump in the Roosevelt Room of the White House in Washington, Friday, Jan. 25, 2019.

The CBO cautioned that its estimates do not incorporate other indirect negative effects, which are more hard to quantify "but were probably becoming more significant".

The amount reflects lost output from federal employees, delayed government spending and reduced demand.

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