Understanding the Impact of the Government Shutdown
- Rating agency Standard and Poor’s estimates the overall impact from the partial government shutdown could shave a modest $1.2 billion off the $19 trillion U.S. economy for each week the shutdown continues.
- Historically, the U.S. stock market has proven resilient during past shutdowns. A review of market performance during the 20 government shutdowns dating back to 1976 shows that, on average, the Standard & Poor’s 500 stock index (a broad gauge of the U.S. market) has posted a decline of 0.4%. In addition, the S&P 500 Index climbed during 12 of the past 21 shutdowns and rose an average of 13% in the 12 months after the government reopened.
- The U.S. government shutdown will not have an immediate impact on the country’s economy, but a prolonged crisis could impact longer-term economic growth as turmoil in Washington continues.