Aftermath of the Longest U.S. Government Shutdown: Economic Insights

Tue Nov 11 2025 09:35:58 GMT+0200 (Eastern European Standard Time)

As the longest federal government shutdown draws to a close, its impact on the economy remains significant, with millions feeling the repercussions. From canceled flights to missed paychecks, the effects are extensive.

The record-breaking U.S. government shutdown has affected 1.25 million federal workers, causing substantial disruptions across multiple sectors. Economic analysts predict a long-term loss of approximately $11 billion despite anticipations of recovery as workers receive back pay. Ongoing challenges include diminished consumer spending, reduced travel activity, and upheavals in welfare programs.

WASHINGTON — The historic federal government shutdown in the United States is reportedly concluding, yet the economic fallout is evident and troubling. Approximately 1.25 million federal workers have been deprived of pay since the shutdown commenced on October 1. The transportation sector has already felt the brunt, with thousands of flight cancellations expected to persist through the week as Congress prepares for a potential government reopening.

In addition to the immediate effects on air travel, the economic toll includes setbacks in government contracts and interruptions to food aid for vulnerable populations. Many industry experts believe the repercussions will linger even as the government resumes normal operations. Gregory Daco, chief economist at EY, stated that this prolonged shutdown will leave a lasting mark due to its unprecedented length.

The Congressional Budget Office predicts a cut in fourth-quarter economic growth by roughly 1.5 percentage points, halving the expected growth compared to the previous quarter. While the anticipated reopening is projected to stimulate first-quarter growth next year by 2.2 percentage points, there will still be a permanent loss of about $11 billion in economic activity.

The repercussions are far-reaching. Federal workers will have missed approximately $16 billion in wages by mid-November, impacting consumer spending at stores and restaurants, while also delaying holiday travel plans. Moreover, the uncertainty has clamped down on the consumer sentiment, marking a significant downturn with long-term implications for economic stability.

As the shutdown disrupts the operational flow across various federal departments, some sectors could face ongoing challenges, complicating recovery efforts once normal operations resume. The road ahead is unclear as the government navigates the aftershocks of this unprecedented event.