Share

POLITICS: PennAve

The months around the government shutdown posted the best economic growth of the recovery

By |
Debt Ceiling,PennAve,Joseph Lawler,Economy,Budgets and Deficits,Government Shutdown,GDP

Last year's government shutdown coincided with the strongest economic growth of the economic recovery, data released by the Bureau of Economic Analysis Wednesday show.

The BEA's revised statistics show that the gross domestic product, adjusted for inflation, grew at an annual rate of about 4 percent in the second half of 2014 — faster than any other two-quarter period during the economic expansion that began in the second half of 2009. The updated data, which includes more information on economic output over the past few years, show that growth was stronger in 2013 than previously thought, thanks to consumers and state and local governments spending more than previously realized.



The government shutdown began on Oct. 1, the first day of the fourth quarter, and lasted 16 days. The legislation funding and re-opening the government also raised the federal debt ceiling, just one day before the Treasury warned it risked a default.

The White House warned at the time that the fiscal showdown would hurt growth by slowing federal payments and raising economic uncertainty. Consumer confidence fell dramatically in the weeks leading up to the shutdown, a phenomenon some economists feared would slow consumer spending and damage the recovery.

Yet the economy appears to have weathered those setbacks and even strengthened over the second half of the year.

A similar dynamic occurred in late 1995, when President Bill Clinton and House Speaker Newt Gingrich presided over a government shutdown caused by conflict over budget policy. Then, commerce gathered strength immediately following the shutdown, even during the blizzard of 1996.

View article comments Leave a comment

More from washingtonexaminer.com