What’s the Final Economic Impact of the Record US Government Shutdown?

Short-lived shutdowns tend to have limited economic effects, but this one might leave a more lasting dent because of its record length. The Congressional Budget Office recently estimated around USD 11bn of economic activity may be permanently lost.

The Shutdown Has Added to the Economic Challenges The shutdown has added to economic challenges such as sluggish hiring and stubbornly elevated inflation. Uncertainty around the release of October jobs and consumer price index data adds uncertainty at a time when the Federal Reserve already faces a contested interest rate decision next month.

Operational disruptions will require time to unwind. Restrictions at major airports are expected to remain in place for several further days, after flight cancellations as overworked air traffic controllers missed pay checks. Some travelers may not rebook their flights, representing some permanently lost business.

It may also require several days for 42mn lower-income Americans enrolled in food aid to get delayed benefits. Some missed restaurant meals might not be made up for as people give up on rather than just postpone select purchases – especially large ones. The cost of Obamacare remains unresolved, raising the stakes for many households entering 2026.

The Record Shutdown Exemplifies Governance Challenges Beyond its ultimately moderate macroeconomic effects, the record shutdown exemplifies the escalating political polarization and governance challenges facing the US. Scope cut the US sovereign ratings last month to AA- from AA, citing governance challenges.

For a look at all of today’s economic events, check out our economic calendar.