Harmful Headwinds

The resumption of student loan payments on 10/1/23 is likely to knock 0.25 percentage points off quarterly annualized GDP. A government closure will knock 0.2 percentage points per week off quarterly annualized GDP, and a UAW strike against all three automakers would knock off another 0.1 percentage point/week. A two-week closure combined with a three-week strike means quarterly annualized GDP declines almost one full percentage point! That’s painful, albeit temporarily.