Here's what stops and what doesn't when the government shuts down

What are the economic consequences of a lengthy government shutdown? Among them is a drop in GDP and a spike in unemployment rate — which could perhaps shove us into a recession.

  • The “drop dead” date for a deal to get done is September 30th, aka tomorrow.

Let’s look at some of the effects a shutdown could have…

  • Crippled GDP: The 5-week shutdown from 2018-19 reduced real GDP by $11bn or 0.3%; $3bn of that $11bn was likely non-recoverable once the government reopened.
  • What about Equities: Using a sample size of shutdowns lasting more than one business day, the SPX fell 2.5% in the 10 days leading up to the shutdown with Tech and Real Estate the biggest laggards.
  • Service Stoppage: The Bureau of Labor, FTC, SEC, Federal Emergency Management Agency, National Parks, and others would all be affected.

Click here to see the full list of affected entities.