Obama Adviser Furman Says U.S. Shutdown Cost 120,000 Jobs

Source: Bloomberg News


By Margaret Talev and Lorraine Woellert - Oct 22, 2013

The partial government shutdown this month trimmed 0.25 percentage point from fourth-quarter economic growth and cost the U.S. 120,000 jobs in October, President Barack Obama’s chief economic adviser said.

An analysis of daily and weekly economic data through Oct. 12 showed weakness in such areas as retail sales, economic confidence and mortgage applications, some of which was directly related to the 16-day shutdown, said Jason Furman, head of the Council of Economic Advisers.

“This all just really underscores how unnecessary and harmful the shutdown and the brinkmanship was for the economy, why it’s important to avoid repeating it,” Furman said at a White House briefing today.

The administration released a report on the CEA’s findings today, the same day a separate Labor Department report showed that job growth slowed in the month before the shutdown began. The White House may use the projections to bolster its bargaining position as talks get under way with Congress to meet a December deadline for a revenue and spending plan.

The White House figures “may prove to be a little bit conservative,” said Russell Price, senior economist at Ameriprise Financial Inc. (AMP) in Detroit. He forecast the shutdown would shave as much as 0.5 percentage point from fourth-quarter gross domestic product.

“You had a precipitous decline in business confidence and consumer confidence,” he said.

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