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Longest shutdown in history costs US economy about $15 billion each week

Jarrell Dillard and Josyana Joshua, Bloomberg News on

Published in Political News

The U.S. government shutdown has become the longest in history, and with no sign of a resolution soon its economic toll is deepening.

Now in its 36th day, the shutdown has surpassed the previous record set in early 2019 during President Donald Trump’s first term. Every week that passes costs the economy anywhere from $10 billion to $30 billion, based on analysts’ estimates, with several landing in the $15 billion range.

In the past, the hit to economic growth has been temporary, with furloughed employees getting back pay and the federal government making up for the halted spending once reopened.

This one stands to inflict more damage, and not just because of its length, economists say. The economy is more fragile than seven years ago, with many Americans fretting about inflation and job prospects. And unlike during the 2018-2019 shutdown, the fallout extends beyond federal workers missing paychecks to millions of Americans losing full access to food assistance heading into the holiday season.

“The experience, historically, is that government shutdowns don’t cause calamity,” said Jonathan Millar, a senior U.S. economist at Barclays. “This time could be different.”

The Trump administration has tried to fire thousands of federal workers during the shutdown and suggested that not all of the estimated 650,000 furloughed workers should be retroactively paid. Even though those efforts may fail, they’ve cast additional uncertainty about how much the economy would recoup.

Depending on its length, the shutdown could lower fourth-quarter economic growth by as much as 2 percentage points, according to the Congressional Budget Office. If the stalemate extends to Thanksgiving week, about $14 billion won’t be recovered at all, the CBO said.

The spillovers into the private sector are already playing out, from idle government contractors to businesses relying on tourists getting hit by the closure of certain parks and museums. Some of the nation’s busiest airports are seeing delays because of shortages of air traffic controllers, who are among the employees who must work but aren’t getting paid.

Here’s a look at the toll across the U.S.:

Furloughed workers

The impact from missing paychecks is being felt across the country — not just in places like the DC area that have high concentrations of federal government workers.

In central Arkansas, Seneca Blount has had to withdraw money from his retirement savings plan and ask for help from his church to cover bills including his rent after he was furloughed from his job at the National Labor Relations Board. The 40-year-old veteran, who lives in Maumelle near Little Rock, has worked there 18 months and previously served 5 years in the military.

Blount said he’s delayed a car-loan payment, but he wonders what will happen this month if he misses another check.

“I can’t keep this up, I literally just signed a lease for my apartment complex,” said Blount, who also pays child support and other expenses as he co-parents his daughter. “Bills don’t care about furloughs.”

With furloughed federal workers technically counted as unemployed, the jobless rate could jump to 4.7% in October when the report is eventually released, from 4.3% in August, according to Bloomberg Economics.

Ripple effects

 

An estimated $24 billion in federal spending on goods and services has been suspended in the first month of the shutdown. It’s now entering a sixth week, and the ripple effects are extending to contractors and suppliers that were expecting to get those funds.

“That raises the risk that these contractors have to furlough their own workers, cut pay for their workers or even lay off their workers if they’re in especially financially dire straits,” said Bernard Yaros, lead U.S. economist at Oxford Economics.

Thousands of privately owned businesses that rely on loans from the U.S. Small Business Administration are missing out on funds. The SBA estimated the shutdown has blocked $2.5 billion in loans for 4,800 small businesses as of Oct. 21 — money that would typically be used for operations, including day-to-day expenses and expansion costs.

“The impacts to businesses are beginning to pile up, and impacting both their current and future growth,” Neil Bradley, executive vice president at the U.S. Chamber of Commerce, said in a statement. “Businesses need government to function.”

Food aid delayed

The Trump administration said this week it would partially fund Supplemental Nutrition Assistance Program, or SNAP, benefits for November to comply with a federal court order, though it would cover only half of what families normally receive and could take weeks to implement.

Melissa Lewis, a 36-year-old, single mother of two children in Lincoln County, Tennessee, is among the 42 million people who rely on SNAP benefits. She said she is concerned she may not be able to provide for her family without the aid as she has had to stop working temporarily due to a series of back surgeries.

“I’ve never had this feeling of, I don’t know how I’m going to be able to feed my kids,” Lewis said. “A lot of people are going to suffer and the government’s not understanding they’re fighting themselves while we’re all suffering,” she added.

Clarissa Clarke, government relations officer for the North Texas Food Bank, expects demand to increase if SNAP benefits aren’t distributed. And though the food bank was able to get its supply of food for the rest of the year, that might not be enough, especially going into the holiday season when demand typically rises.

Another program that has seen disrupted funding is Head Start, which offers school and daycare services. This allows some parents to work, look for jobs or attend school, when they otherwise would not be able to. More than 8,000 children and families lost access to the services as of Nov. 3, said the National Head Start association, warning that the number would likely grow each day the government remained shutdown.

At the heart of the debate in Washington are subsidies enacted by Democrats in 2021 that make premiums cheaper for the more than 20 million Americans who get health care through Affordable Care Act marketplaces. The credits, set to expire at the end of the year, could cause the average premium to more than double, according to KFF, a health policy research organization.

“The economic damage will escalate further if the shutdown extends beyond Thanksgiving and weighs on consumer confidence and spending during the key Christmas buying season,” Mark Zandi, chief economist at Moody’s Analytics, said.

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—With assistance from Jade Khatib.


©2025 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.

 

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