As the US government reopens on Monday, after a five-week shutdown, S&P Global Ratings says the move has caused the loss of $6 billion to the US economy.
United States President Donald Trump agreed on Friday that the federal government reopen for three weeks by Monday.
In order to renegotiate funds from Congress to build a wall on the southern border with Mexico, Trump ordered ending the 35 day partial shutdown, the longest in the US history.
According to S&P Global Ratings, the US economy lost at least $6 billion during the partial shutdown of the federal government due to lost productivity from furloughed workers and economic activity lost to outside business.
Omer Emec, chief economist at Albaraka Turk bank, spoke to TRT World about the effects of the shutdown and S&P fıgure.
"Apart from the $6 billion calculated by S&P, we don’t know yet, because a lot of data announcements were postponed as part of the shutdown. These are going to be announced this week and then we will have a clearer picture. But if I have to guess, its biggest impact was and probably will be on consumer sentiment and thus, eventually, consumption," said Emec, adding that at least two million people have been affected by the shutdown.
"No news source citing that figure had the common courtesy to put up a link to the original release and there is no such press release on S&P Global Ratings website," Emec continued.
Emec underlined that it was likely the S&P figures were sent directly to the news agencies and lacked a proper document “explaining the methodology”.
The S&P figure also exceeds the $5.7 billion amount that Trump had demanded from the Congress for the border wall.
Trump, In an interview with The Wall Street Journal on Sunday, Trump discussed the chance of reaching an agreement between Democrats and Republicans in Congress to avoid another closure of the federal government in the next three weeks.
“I personally think it’s less than 50-50, but you have a lot of very good people on that board,” the president said, referring to his appointed committee for the negotiations.
A further shutdown is still an option for Trump, if an agreement can’t be reached in the given three-week period.
Government workers missed two paychecks
During the 35-day partial government shutdown, at least 800,000 federal workers went unpaid, and 380,000 were furloughed.
Some federal agencies have reported much higher absence rates among workers who were working without paychecks.
Federal workers have also missed their second paycheck because of the shutdown. They cannot be paid immediately on Monday as the payroll process takes at least two or three days.
The Department of the Treasury, Department of Agriculture, Department of Homeland Security, Department of the Interior, Department of State, Department of Housing and Urban Development, Department of Transportation, Department of Commerce and Department of Justice were all rendered defunct by Trump's shutdown decision.
According to a statement from the Office of Management and Budget, the 2013 government shutdown had some impacts on the economy during the Obama presidency.
The shutdown in 2013 was also one of the longest in US history and saw nearly 850,000 workers were furloughed.
“The payroll cost of furloughed employee salaries alone – that is, the lost productivity of furloughed workers – was $2.0 billion,” the statement read.
The shutdown hurt the private sector. In 2013, 120,000 private jobs were snuffed out in just two weeks.
Is the worst yet to come?
"One of the most important things we have observed during this process was that Trump’s personality and the fact that Democrats got the House in the midterms created a dangerous concoction," Emec said.
He added that government shutdowns are a common feature of the American democracy and the real question now was whether Trump's personality would cause another gridlock when the debt ceiling has to be raised in March.
"That might prove to be a lot more impactful to the American economy, since using current estimates, if the Congress can’t raise the ceiling until June, the US will go into technical default," he said.
"So the most economically critical thing revealed during the last 35 days is how much risk the mixture of Trump’s character and the Democratic-majority House can create."