The U.S. economy will lose between $7 billion and $14 billion due to the federal government shutdown, according to a new report released Wednesday by Congress’s nonpartisan bookkeeper.
Federal workers missing paychecks and the interruption of food benefits for low-income Americans are expected to temporarily lower gross domestic product by 1 to 2 percentage points in the fourth quarter of 2025, the Congressional Budget Office reported.
Output is expected to spring back once the government reopens and services resume, reversing most of the economic slowdown. But the hours lost by furloughed federal workers would permanently impact real GDP — an effect that would get worse the longer the shutdown drags on.
“In CBO’s assessment, the shutdown will delay federal spending and have a negative effect on the economy that will mostly, but not entirely, reverse once the shutdown ends,” CBO director Phillip Swagel wrote in a letter to House Budget Chairman Jodey Arrington (R-Texas), who requested the analysis.
If Congress agreed to reopen the government this week, the economy would lose $7 billion by the end of 2026 compared to if there had not been a shutdown, according to CBO.
If the shutdown ends after six weeks — which would be around Nov. 12 — the economy would permanently lose $11 billion in GDP by the end of 2026. That loss would grow to $14 billion if the shutdown lasts until the end of November.
“Democrats are playing politics, and the American people are paying the price,” Arrington said in a statement. “ … For hardworking families that means higher unemployment, lower wages, and less money in their pockets.”
The federal government shut down on Oct. 1 when Congress failed to pass a temporary funding measure. Democrats have insisted that Republicans agree to extend Affordable Care Act subsidies that expire at the end of the year in exchange for their votes to fund the government; Republicans have said they won’t negotiate on the ACA until the government is reopened.
