Government shutdown could bring unprecedented federal job losses nationwide

Past government closure was more political theater than economic shock, markets and jobs quickly returned.

This time still president Donald TrumpThe warning that some distant workers may not return to their work, raises risks and a routine deterioration turns to a fragile labor market.

If Trump performed this threat, he would almost definitely face the challenge of a court. However, if it stops, a closure, which is rejected as partisan brinking rather than financial disruptions, can have permanent economic consequences.

Closing announced: Who works, who is not and how much it cost

Wealth Alliance CEO and General Manager Robert Conzo, a financial consultant company, said that such a movement will mark the undesirable region.

“If the US Federal Government rejects them instead of forcing them, I believe that the labor market can see a shock with a higher unemployment rate and the first unemployed claims,” ​​Conzo said, ” He said.

“The biggest question for me is whether Trump uses it as a title negotiation tactic or as a turning point to reduce federal expenditures in the future.

The government will close at 12:301 on Wednesday Congress It cannot approve a financing extension. Closing requires federal agencies to send domestic workers to unable to be deemed necessary. These distances are temporary; When the congress decodes the stop, the employees are brought back and receive a refund.

Every week of a closure reduces approximately 0.2% of the US economic growth, but this loss is typically compensated after federal workers return and the agencies have been reopened.

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The labor market is already on a shaky ground. Washington, DC region, hosts a large share of federal workers, and after Elon Musk, it became particularly difficult Ministry of State Efficiency (Doge) Advisory Board suppressed for layoffs earlier this year.

Trump told journalists at the White House on Tuesday, and asked how many federal workers could be dismissed.

President Donald Trump speaks to the media members in the Southern Sap of the White House before boarding Marine One in Washington on Tuesday, September 30, 2025. (Francis Chung/Politico/Bloomberg/Getty Images)

The Trump administration is preparing to control the largest mass resignation in the history of the US, and more than 100,000 federal employees are planned to be separated under the postponed resignation program.

At the same time, if the federal agencies, deputies could not make an agreement, raising bets for a prepared labor force for turmoil, they prepared plans for layoffs.

And the timing could not be worse: these workers step into a labor market that loses acceleration. unemployment It rises to 4.3% in August – the highest since 2021.

The weak August report came to the heels of another soft reading in July, which pushed Trump to expel the Office of the Working Statistics (BLS) Commissioner. Erika Mcentarfer. The removal came hours after the agency’s publishing new data showing that business growth has been exaggerated to a significant extent. The Bureau revised May and June with 258,000 work and pointed out an unusual correction of sharp criticism from Trump.

The White House hit the 911K work revision, which is the largest under registration, and demands that the Fed rate is cut off.

The latest BLS revisions now show that previous reports exaggerate the employment of more than 900,000 jobs. The adjustment, which is the largest correction at the records and upper ends of the Wall Street forecasts, comes when intensifying the pressure on Trump. Federal reserve To reduce interest rates to support growth.

Federal Reserve President Jerome Powell speaks to journalists after the regular Federal Open Market Committee meetings in the FED in Washington on July 30, 2025. (Chip Somodevilla/Getty Images)

Against this background, the threat of closure of a government seems great. Analysts warn that the misleading of federal workers can add another coercion to a labor market that has already cracked.

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Brian Mulberry, Senior Portfolio Manager of Zacks Investment Management, said 100,000 jobs may be at risk if a closure of Fox News Digital.

Nevertheless, he said that the wider economic impact can be silenced:

“The loss of 100,000 federal workers will move the unemployment rate higher? No answer,” said Mulberry, if the private sector cannot balance recruitment losses, it would only add 0.06 percent points.