The Holocaust was profitable, so in a financial sense it wasn't inhibiting war efforts. We know for instance that Operation Reinhard, the killing of at least 1.7 million mainly Polish Jews in the death camps of Treblinka, Sobibor and Belzec in 1942-43 netted 180 million Reichsmark, or about 100 Reichsmark for every murdered man, woman and child.

How? Because the Germans told their victims that they were going to be “permanently resettled in the East”. When you hear that you are going to be sent to a far-off and unknown destination with no hope of ever returning, you take any portable valuables you may have with you. This was a time and a place where most people did not invest their savings in stocks and bonds, they put them in gold and jewelry, which are much easier to hide, carry around, trade for necessaries, etc.

When the people arrived at the Operation Reinhard camps they were told to put their luggage to the side, undress completely and leave their valuables at a purpose-built little office for safekeeping, as they were all going to take a disinfection bath before proceeding to their final destinations further East. After they had been killed, the Jewish Sonderkommandos (worker slaves) were forced to rip the gold teeth, if any, out of the mouths of the corpses, and inspect the bodily orifices for hidden objects.

What was to be done with all these clothes, the contents of the suitcases, the valuables, the gold and all the rest of it, is outlined in a letter SS-Brigade-Führer August Frank sent to Auschwitz and the headquarters of Operation Reinhard in Lublin on September 26, 1942. Frank was the head of the SS-Wirtschafts-Verwaltungshauptamt (WVHA, the SS Main Economic and Administrative Department), which was in charge of the financial side of the Final Solution of the Jewish Question. I have summarised its points below:

1. Cash to be paid into the WVHA account.
2. Gold (including golden teeth), precious metals and stones, jewelry to be handed over to the WVHA.
3. Watches, clocks, pens, mechanical pencils, razors, pocket knives, scissors, flashlights, wallets to be sold to the Army.
4. Men's clothing and shoes to be handed over to the Volksdeutsche Mittelstelle (Welfare Office for Ethnic Germans). The proceeds to go to the WVHA. May exceptionally be used for the needs of the Army.
5. Women's and children's clothing and shoes to be sold to the Volksdeutsche Mittelstelle.
6. Bedding, suiting, scarves, umbrellas, canes, thermos flasks, earwarmers, prams, combs, handbags, leather belts, shopping bags, pipes, sunglasses, mirrors, cutlery, backpacks, suitcases to be handed over to the Volksdeutsche Mittelstelle (Welfare Office for Ethnic Germans). Payment will be discussed later.
7. (Bed) linen, dish and bath towels, tablecloths to be sold to the Volksdeutsche Mittelstelle. May also be used for the troops, for a fee.
8. Glasses to be handed over to the Medical Branch. Glasses with golden frames to be classed with the precious metals.
9. Valuable furs, treated and untreated, to be handed over to the WVHA. Inferior furs (sheep, rabbit, hare) to be sent to [the concentration camp for women at] Ravensbrück.

In addition to the portable valuables thus obtained, the Germans also robbed the Jews of their real estate and businesses through so-called “aryanisation” but as a lot of that was private people buying Jewish properties at severely reduced prices, especially in Germany before the war, the revenue accrued by the state came from an “equalisation tax” payable by the new owners on the difference between the real value of the properties and the actual purchase price. These taxes brought in at least tens of millions (we don't have all the figures) in Germany alone.

Then there was the “emigration tax” payable by German Jews who left the country before 1941 which netted 900 million Reichsmark. Or how about the “atonement tax” payable by the German Jews after the assassination of a German diplomat in Paris, the incident that sparked Kristallnacht? That yielded 1.1 bilion Reichsmark... And so it goes on.

Nor was the Holocaust a burdensome affair in terms of manpower. At the peak of their operations, the Einsatzgruppen who shot Jews en masse in the occupied Soviet Union were to be counted in the tens of thousands, a tiny percentage of the millions of Germans deployed to the Eastern Front. And by establishing the death camps the killing became exponentially more efficient in terms of manpower allotted. Belzec, Sobibor and Treblinka, where 1,700,000 were killed at a minimum were staffed by just over 100 (one hundred) German SS guards and about 1,500 mainly Ukrainian volunteers. That's for the three camps combined.