With the federal government shutdown now in its second week, its ripple effects are being felt across the economy, from furloughed workers and stalled business loans to delayed economic data that could cloud future interest rate decisions.
St. Cloud State Economist King Banaian says however, that the 35-day federal government shutdown at the end of 2018 did not result in economic crisis…
“It didn’t cause a recession. The unemployment rate went up by one or two-tenths of a percent. You know, in the month or two after that — that would be a really long one. I don’t think anyone thinks this one’s gonna go 35 days. But again, I will say the economy in 2019 did not go into recession. The recession came in 2020 and that was because of COVID, not because of a shutdown.”
Two proposals to end the governmental shutdown both failed in the U-S Senate on Wednesday.
(content: courtesy MNN)
