Federal shutdown could cost US economy up to $14 billion

[BumRushDaShow]

Source: Aol/Reuters

Wed, October 29, 2025 at 4:42 PM EDT


WASHINGTON (Reuters) -The federal government shutdown could cost the U.S. economy between $7 billion and $14 billion, shaving up to 2% from gross domestic product in the fourth quarter due to the lapse in government spending, the nonpartisan Congressional Budget Office said on Wednesday.

The partial shutdown was in its 29th day on Wednesday with no end in sight, as Senate Republicans called on Democrats to support a stopgap measure to fund federal agencies through November 21 and Democrats demanded negotiations to extend expiring federal tax credits to help Americans purchase private health insurance coverage through the Affordable Care Act.

CBO estimated that the economy would suffer as a result of delayed federal spending for employee compensation, goods and services, and food stamp benefits for low-income Americans.

"Although most of the decline in real GDP will be recovered eventually, CBO estimates that between $7 billion and $14 billion will not be," agency director Phillip Swagel said in an October 29 letter to House of Representatives Budget Committee Chairman Jodey Arrington, a Texas Republican who requested the analysis.

Read more: https://www.aol.com/articles/federal-shutdown-could-cost-us-204206724.html

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Link to Congressional Budget Office (CBO) REPORT - https://www.cbo.gov/system/files/2025-10/61823-Shutdown.pdf

[2naSalit]

1. And that's before...

You include what they're stealing this whole time.

[Groundhawg]

4. What is being stolen?

[IbogaProject]

12. $20 billion to Argentina and a $20 billion loan guarantee

That is to start, but he has been letting criminal fines be voided during his sketchy pardon process. Every time he plays golf, the Secret Service are staged ahead and after and pay marked up costs for rooms at his restorts. It is near endless how much he is swiping this round now that he has experience and figured the scheems out.

[Javaman]

2. that's right now.

but what will it cost us when it doesn't open back up? oh yeah, all our rights.

[LonePirate]

3. $14B is a rounding error in the federal budget. The gov won't care a out this.

[Bernardo de La Paz]

5. I don't see that adding up to 2%. The article writer might be the problem?

US is a $20 trillion+ GDP, $20 billion is one part in a thousand. One tenth of one percent. 0.1%. I have seen estimates of 0.1% per week, and some of that recovered.

[BumRushDaShow]

6. "I don't see that adding up to 2%. The article writer might be the problem?"

They are quoting directly from the linked CBO report -

(snip)

Effects on Real GDP. Economic activity at the end of 2025 will be lower as a result of the shutdown. That decline will be driven by three factors: Fewer services will be provided by federal workers, federal spending on goods and services and SNAP benefits will be temporarily lower, and a temporary reduction in aggregate demand will lower output in the private sector. Real GDP will rebound when federal funding resumes, with most of the forgone output made up in the future. The reduction in output stemming from the time furloughed employees did not work will not be recovered.

In all three scenarios that the agency analyzed, the shutdown leads to a temporary economic slowdown. Real GDP is lower in the fourth quarter of 2025 than it otherwise would have been; the reduction in economic activity will intensify the longer the shutdown persists. The rebound in federal spending for employee compensation, the purchases of goods and services, and SNAP benefits that occurs after the shutdown ends reverses most of the reduction in economic activity. The uptick in economic activity stems mainly from the higher federal spending on goods and services and the associated increase in aggregate demand as households and businesses boost their spending in response to the restoration of their income following the shutdown.

The agency estimates that the annualized quarterly growth rate of real GDP in the fourth quarter of 2025 would be lower by 1.0 percentage point in the four-week shutdown scenario, 1.5 percentage points in the six-week scenario, and 2.0 percentage points in the eight-week scenario (see Table 2). In the first quarter of 2026, as federal spending continued to rebound following the resumption of funding after the shutdown, real GDP growth would be boosted by 1.4 percentage points, 2.2 percentage points, and 3.1 percentage points in the three scenarios, respectively. The effect on the annualized quarterly growth rate of real GDP (that is, how fast real GDP increased compared with how fast it would have grown in the absence of a shutdown) would be larger after federal funding resumed because output would be temporarily higher than it would have been otherwise. After the first quarter of 2026, the temporary boost to the level of real GDP would diminish as output returns toward the level it would have been in the absence of the shutdown, causing the effect on the growth rate to temporarily turn negative.

(snip)

[Bernardo de La Paz]

7. Thanks. I missed that it was per the quarter.

So 0.1% per week annual effect is more like 0.4% per week for the quarter. Multiply by 4 and it is about 1.6% per month per quarter, more in line with the CBO 1.0% per quarter.

Trust the CBO, not me.

[BumRushDaShow]

9. They are doing the 3 shutdown scenarios by quarter

and then annualizing them. I know progree likes to do his monthly and quarterly calcs and then annualize them when he posts his reports.

[IbogaProject]

14. Those percents are reduced growth in GDP.

was 2.5% annual growth forcast with a rough GDP of ~30 trillion, equals economic growth forcast for 26 fiscal year of 750 billion, ~2% equals -$15 billion. They are rounding down slightly for some reason, maybe as GDP is 29 something. I don't feel this is an accurate estimate and it biased to drip the news slowly to not upset the markets.

[usonian]

8. Trump says: "WORTH EVERY PENNY" to prevent the fall of King Donald, now that Prince Andrew has fallen.

The shutdown will never end.

[33taw]

10. I don't see where Prince Andrew fell. He lost the title of Duke of York. He is not in prison, not being prosecuted and

worth millions. If he fell, it wasn't far enough.

[usonian]

11. I am thinking "The Man Who Would Be King" by Kipling.

Takes a scratch to break the notion of infallibility.
If royalty and their circle have "Divine Right" (they don't) then he's disgraced.
No more "Droit du Seigneur" for Randy Andy.
YMMV, of course.

[IbogaProject]

13. Propaganda, that number is to delay a needed stock correction

The hit will be much worse starting Next week add -$2 billion per week and that has an immediate multiplier of x1.8 so this will start to have impacts.