How Much Did the Shutdown Cost the Economy?

Trump, however, continues to insist that any deal include funding for a wall along the Mexican border, and he threatens to shut down the government again or possibly declare a national emergency in order to build a wall if it doesn’t. Another partial shutdown is “certainly an option,” Trump told The Wall Street Journal.

“Although this funding battle has ended, the next one starts in a few weeks, which may reduce growth expectations if businesses and financial markets begin to expect that Congress and the president will repeat the experience again and again,” according to S&P analysts.

Longer term, the shutdown may hurt morale and productivity of government workers who were required to work without pay and “create a challenge for government agencies and contractors” to hire and rehire workers,” according to S&P. “The next time the government decides to close (which is all too frequent), these workers may decide to opt for a job in another industry that they feel has more job security.”

Fears of another shutdown underlie a warning by Keith Hall, CEO of the National Association of the Self-Employed (NASE), that small-business owners “should brace themselves for a tax season filled with frustrations and delays … The government shutdown has created an additional level of uncertainty for small-business owners at the worst possible time,” said Hall, in a statement.

Another shutdown would not only be “a risk to GDP growth in the first half of the year” but also a possible precursor to a “showdown on the debt ceiling,” which will be reached after March 1, according to Tony Roth, chief investment officer of Wilmington Trust. “A breach of the debt ceiling would be a profoundly damaging event, so the machinations of debate around it will move markets along the way,” writes Roth in a market note.