Government shutdowns usually have little economic impact. This time could be different
Washington is an appearance of US Capitol on September 29, 2025 at DC.
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For all the political fire storms they produce, the closure of the government was historically Nonvivent for both markets and economy.
However, this time it can be different.
This is because President Donald Trump threatened to make some fervers furs caused by the closure of Trump.
If the Trump follows the threat – and successfully the weather will be almost another challenge for the executive authority – otherwise it will assign a key to the more political than economic events.
“This time we have a reason to think that a closure may not follow the past precedent,” Barclays Public Policy Senior Analyst Michael McLean said. He said. If Trump follows it, “This would be an important attempt from past practices, and we can inject a new uncertainty on the economic impact of a closure, otherwise we would expect to be marginal.”
Indeed, in the past, the closure has left very little except for the political damage to the party perceived as faulty.
Markets sold from time to time, but then healed rapidly. For growth, most economists calculate the effect of about 0.1 percent of gross domestic product throughout the week. The longest closing lasts 35 days, from 2018 to the next January, not much for an economy of $ 30 trillion. According to Bank of America, short -term losses can usually be easily compensated in subsequent neighborhoods.
Labor Market Problem
The closure means automatically, unseen employees are removed, but always recall after the deadline. Trump, in a NBC news interview on Sunday, “We will cut many people … We can permanently cut.”
Nomura Economist David Seif wrote that the impact on the monthly non -agricultural payroll report would not emerge until the October number was published in November, and Trump’s threat may have a more serious effect than normal, Dav he wrote Nomura David Seif.
However, this brings another wrinkle: If the closure lasts for a significant time, it may delay the release of basic economic data.
Impact on BLS
The Ministry of Labor said on Friday, almost all activities will close, he said. The Office of the Department, which issued many important economic reports, including the number of monthly work, will be closed as long as the closure continues. In an action plan to address the situation, the department warned about delays and also said that there may be a “decrease in quality” for data.
For social security buyers, a delay in the publication of the consumer price index inflation reading may affect life cost adjustments.
The situation may also affect the Federal Reserve, It is based on BLS data while making decisions regarding interest rates and other issues related to monetary policy.
“While the US government may tend to close, we expect very little economic impact,” Mark Cabana, President of the Price Strategy in Bank of America. He said. “A closure will pause the economic data bulletins and the Fed trusted special data for policy decisions if the closure is prolonged.”
One result will be the closure of 2013, where the September job report is postponed until October 22nd. The CPI of that month was postponed for two weeks.
Elizabeth Renter, the senior economist of Nerdwallet, agreed that the final effect should be “relatively light” because most Wall Street analysis has the same agreement. However, he said that he had potential in the labor market.
“The most urgent and effective effect is furry federal employees and contractors.” He said. “Households can bring back their financial stability to a significant extent when they are forced to go without income even for a week.”
