The ongoing U.S. federal government shutdown, now prolonged past two weeks, is imposing mounting costs on the economy, workers and public services. According to a memo from the Council of Economic Advisers, GDP could lose as much as $15 billion each week the funding lapse persists.
On the front lines, approximately 750,000 federal employees have been furloughed, while many essential staff continue working without pay. Furloughed workers are filing for unemployment in rising numbers: weekly initial claims for federal workers more than doubled, underlining immediate financial distress.
Beyond direct employment, ripple-effects are hitting households and consumers. With paychecks delayed, consumer spending is projected to drop by roughly $30 billion if the shutdown lasts a month. Regional economies that rely heavily on federal employment and contracting are already reporting lost revenue. For example, closures of major museums and national attractions are hitting tourism and local retail.
The shutdown is also disrupting core public functions: key economic data releases are suspended, hampering the Federal Reserve’s ability to set monetary policy, and programs for vulnerable populations are under strain.
While past shutdowns have typically resulted in a bounce-back once funding resumed, analysts warn this one could leave permanent damage. A previous 35-day shutdown reduced GDP by at least $11 billion, with about $3 billion never recovered.
For workers, businesses, and the broader public, the message is clear: the financial and social costs are mounting, and every additional week of this shutdown deepens uncertainty and erodes confidence.
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