NEW YORK (10/21/13)--An index measuring future economic growth increased slightly last week, but its measure of annualized growth fell to a 13-month low.
The New York-based Economic Cycle Research Institute said its Weekly Leading Index rose to 130.4 for the week ending Oct. 11, up from 130.3 the previous week--a number that was revised down after being initially reported as 130.4.
The measure's annualized growth rate fell to 2.8%, to its lowest number since September 2012. The week before, which ended Oct. 4, the index measured annualized growth at 3.6%--a figure revised downward after being originally reported as 3.8%.
In late August, the ECRI annualized growth rate started to climb from just under 4%, peaking at 4.6% just before the federal government's partial shutdown, for the week ending Sept. 27. It has steadily fallen by almost a percentage point per week since.
WASHINGTON (10/21/13)--Cost estimates of the federal shutdown to the economy--in terms of lost productivity and sales--range from $12 billion to $24 billion (The Federal Times Oct. 18), with some predictions indicating that the most deleterious effects of the dysfunction could be yet to come.
The $24 billion figure came from a report by Standard & Poor's. The analysis also predicts that the shutdown will see fourth quarter growth shrink to 2.4%, down from the 3% prediction that the ratings agency issued before the impasse (CNNMoney Oct. 16).
Moody's analytics reported that the shuttering of federal offices that handle mortgages, small business loans and other permits coupled with disruption to the tourism industry will cost the economy about $7 billion in the fourth quarter.
Economists expect consumer activity in the coming weeks to be buoyed by back pay for federal workers. But Beth Ann Bovino, lead U.S. economist at Standard & Poor's, said that could be eroded by the impending budget negotiations and debt ceiling negotiations in Congress, which must take place in January and February to avoid a potential shutdown and default, respectively.
Contractors who were furloughed won't receive mandated back pay, either.
Raising fears of yet unseen damage done by the shutdown, the Bloomberg Consumer Comfort Index, a metric of consumer expectations, was at its lowest since November 2011, and indicated that the share of people predicting a worsening economy increased most dramatically since the collapse of Lehman Bros.--an event that led to the worldwide financial crisis in the fall of 2008 (Bloomberg.com Oct. 17).