White House: Shutdown drama hit jobs, growth

People look at a sign for informing that the Statue of Liberty is closed due to the government shutdown in Battery Park on Oct 1, 2013 in New York City. The White House said on Tuesday this month's political showdown likely shaved at least a qua
People look at a sign for informing that the Statue of Liberty is closed due to the government shutdown in Battery Park on Oct 1, 2013 in New York City. The White House said on Tuesday this month's political showdown likely shaved at least a quarter per cent off fourth quarter economic growth and meant 120,000 fewer jobs were created in October. -- PHOTO: AFP

WASHINGTON (AFP) - The White House said on Tuesday this month's political showdown likely shaved at least a quarter per cent off fourth quarter economic growth and meant 120,000 fewer jobs were created in October.

Mr Jason Furman, chairman of the president's Council of Economic Advisors, presented the first detailed official analysis of the government shutdown and debt default saga, which he called a "self inflicted economic wound." Mr Furman said that the study, using multiple streams of data, showed that the 16-day political drama had cut 0.25 percentage points off the fourth quarter growth rate.

In turn, that would mean the economy would have created "120,000 fewer jobs than we otherwise would have had in the month of October." And Mr Furman warned things could get worse.

"I want to stress that's just based on the data we have through October 12th. So as we look at more of October, those numbers could change and could potentially get worse."

"This all just really underscores how unnecessary and harmful the shutdown and the brinksmanship was for the economy, why it's important to avoid repeating it."

Mr Furman spoke on the day the Labour Department released September jobs figures that were delayed by the shutdown, that was ended last week with a last ditch deal in Congress to reopen federal operations and raise US borrowing authority.

The figures showed job creation was sluggish even before the shutdown.

The jobless rate fell to 7.2 per cent in September from 7.3 per cent the month before.

The economy generated a less-than-expected 148,000 jobs during the last month, but revisions for July and August that added 9,000 net new positions to the data helped push the overall unemployment rate down.