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Photo: Mandel Ngan / AFP / Getty Images

A government shutdown will reduce U.S. GDP in the first quarter of 2018 by upwards of 0.2%—or $6.5 billion—each week it continues, according to Beth Ann Bovino, chief U.S. economist for S&P Global Ratings.

Why it's so costly: Roughly half of the hit results from the lost production of non-essential government workers.

  • After previous shutdowns, Congress has agreed to repay furloughed workers for their lost wages, but the economy did not regain their lost productivity since they were barred from working while the government was closed.

Indirect costs: A shutdown will affect more than just government employees and agencies, Bovino warns.

  • Private contractors who rely on government spending will also be affected. Though they will eventually recover that lost business, they "are going to push off some of their investment ideas or investment plans until they get more certainty," she says.
  • According to a National Association of Government Contractors survey following the 2013 shutdown, 29% of such companies delayed hiring as a result, and it negatively affected 58% of them.
  • Bovino said the closing of national parks and monuments hurts local businesses that rely on tourist traffic.

A higher deficit: Government shutdowns make running the government more expensive. The Office of Management and Budget estimates that the 2013 shutdown raised the budget deficit by at least $2 billion, due to the added costs of stopping and starting government programs.

Go deeper

U.S. economy adds 245,000 jobs in November as rate of recovery slows

The U.S. economy added 245,000 jobs in November, while the unemployment rate fell to 6.7% from 6.9%, the government said on Friday.

Why it matters: The labor market continues to recover even as coronavirus cases surge— though it's still millions of jobs short of the pre-pandemic level. The problem is that the rate of recovery is slowing significantly.

This story is breaking news. Please check back for updates.

1 hour ago - Health

Fauci says he accepted Biden's offer to be chief medical adviser "on the spot"

The government's top infectious-disease expert Anthony Fauci said Friday that he "absolutely" will accept the offer from President-elect Joe Biden to serve as his chief medical adviser, telling NBC's "Today" that he said yes "right on the spot."

Why it matters: President Trump had a contentious relationship with Fauci, who has been forced during the pandemic to correct many of the president's false claims about the coronavirus. Biden, meanwhile, has emphasized the importance of "listening to the scientists" throughout his campaign and transition.

Updated 3 hours ago - Politics & Policy

Highlights from Biden and Harris' first joint interview since the election

Joe Biden. Photo: Mark Makela/Gettu Images

President-elect Joe Biden and Vice President-elect Kamala Harris sat down with CNN on Thursday for their first joint interview since the election.

The big picture: In the hour-long segment, the twosome laid out plans for responding to the pandemic, jump-starting the economy and managing the transition of power, among other priorities.

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