The Economic Impact of the 2025 Government Shutdown

LAST UPDATED: November 1, 2025 (Day 32)

What is the real cost of the 2025 government shutdown? We are tracking the impact on U.S. GDP, the national debt, federal workers, and the wider economy as the shutdown enters its 32nd day.

Economic Impact at a Glance (Day 32)

After 32 days, the shutdown is inflicting permanent, measurable damage on the U.S. economy.

Lost Economic Output (GDP)

~$25 Billion (and growing)

The non-partisan Congressional Budget Office (CBO) estimates the shutdown is costing the U.S. economy approximately $800 million per day. This lost economic activity is permanent and will not be recovered.

Cost to Taxpayers

~$3.1 Billion in Lost Productivity

This is the estimated cost of paying 800,000+ federal employees (required by law) for the weeks they were furloughed and not working. This money is paid for work that was never performed.

Delayed Federal Contracts

~$5.8 Billion

Billions in federal contracts to private sector companies (especially small businesses) are frozen. These companies are not being paid, forcing them to lay off their own non-federal employees.

Official CBO & Economic Analysis

The “gold standard” for non-partisan analysis comes from the CBO and OMB, which track the shutdown’s effect on spending and GDP.

Official Analysis

Congressional Budget Office (CBO)

The CBO provides official estimates of the shutdown’s cost. It has stated that beyond the cost of back pay, the shutdown permanently reduces economic growth by halting federal services, delaying contracts, and reducing private-sector spending.

White House Analysis

Office of Management & Budget (OMB)

The White House’s economic advisors have warned that a shutdown lasting over one month could erase all economic gains for the quarter and risk pushing the economy toward a recession.

Factual Context

U.S. National Debt Clock

This live clock is often cited in the political debate over fiscal responsibility, showing the real-time U.S. debt that is at the heart of the funding disagreement.

Impact on Federal Workers & Contractors

The economic pain is most concentrated on the 800,000 federal workers and millions of contractors who are not receiving paychecks. This creates a ripple effect as their families stop all non-essential spending.

Federal Employees

800,000+ Workers Unpaid

Federal workers (both furloughed and “excepted”) have now missed a full pay cycle. By law, they will receive back pay once the shutdown ends. However, this does not help with bills that are due today.

Federal Contractors

Millions at Risk, No Back Pay

Federal contractors (cleaners, IT support, security, etc.) are not federal employees. They are not guaranteed back pay. For them, this is a permanent loss of income, leading to layoffs and small business closures.

Impact by Sector (Science, Health, Business)

The economic damage is not just in lost pay; it’s in frozen services that support the entire private sector.

Science & Research

Scientific Research Frozen

Billions of dollars in federal grants from the National Institutes of Health (NIH) and National Science Foundation (NSF) are paused, halting medical research and university projects nationwide.

Health & Safety

FDA & USDA Inspections

Routine food safety inspections by the FDA are halted. While high-risk meat inspections at USDA continue (as “excepted” work), the overall food supply chain is facing reduced oversight.

Travel & Tourism

Airport & Park Delays

Longer lines at airports from TSA “sick outs” cost airlines and travelers millions per day. The closure of all National Parks is devastating tourism revenue in gateway communities.

Impact on the National Economy

The shutdown has ripple effects far beyond Washington D.C., affecting credit, business, and investment.

U.S. Credit Rating

Credit Agencies Issue Warnings

Rating agencies like Moody’s and Fitch have warned that the shutdown demonstrates political instability, which could lead to a downgrade of the U.S. credit rating. This would make all government borrowing more expensive.

Business & Investment

Stock Market & SBA Loans

While the stock market has been resilient, prolonged shutdowns create uncertainty that hurts investment. The freeze on all new SBA loans also halts a critical source of capital for small businesses nationwide.

Key Concept

Shutdown vs. Debt Ceiling

This is a shutdown (a lapse in *funding*). It is different from a Debt Ceiling crisis, which is a failure to pay the country’s *existing* bills. Both are economically damaging, but a debt default would be catastrophic.

Impact on Local Economies

The national numbers are large, but the pain is felt most in local communities that depend on federal spending.

D.C. Metro Area

Local Spending Collapse

Hundreds of thousands of unpaid federal workers and contractors in the D.C., Virginia, and Maryland area have stopped all non-essential spending, crushing local restaurants, shops, and service businesses.

National Park Towns

Tourist Economies Halted

“Gateway” towns like Gatlinburg, TN (Smoky Mountains) or Moab, UT (Arches) depend on park tourism. With all National Parks closed, these local economies have seen their primary source of revenue vanish.

Historical Cost of Shutdowns

Past shutdowns provide a clear picture of the economic damage we are currently facing.

2018-2019 Shutdown (35 Days)

$11 Billion in Lost GDP

The CBO estimated the longest shutdown in U.S. history cost the economy $11 billion. Of that, $3 billion was permanently lost and never recovered.

2013 Shutdown (16 Days)

$24 Billion in Lost GDP

Though shorter, this shutdown was more widespread. S&P Global estimated it cost the U.S. economy $24 billion, or $1.5 billion per day, and slowed quarterly GDP growth by 0.6%.