Nov. 13, 2025, 11:34 p.m.

Economy

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The unprecedented government shutdown has put further strain on the already fragile U.S. economy.

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The six-week U.S. government shutdown finally ended late Wednesday night, but its damage to the economy continues to unfold. While the full impact may take months to become clear, it is certain that the shutdown has placed an even heavier burden on an already weak economy, already burdened by multiple pressures including inflation, high tariffs, and a slowing labor market.

First, approximately 1.25 million federal employees have not received their paychecks since October 1st. More than 10,000 flights have been canceled in the past week, and the air network is still struggling to recover. Even with air traffic controllers back on duty, flight delays and passenger congestion will continue. Government contract payments have slowed dramatically, food assistance programs have been disrupted, and some recipients have experienced benefit delays.

Second, while most federal employees will eventually receive their back pay, allowing some economic activity to recover, many losses remain unrecoverable: canceled flights cannot all be rescheduled, restaurant reservations and travel plans are difficult to reschedule, and some delayed spending may even be permanently lost.

Meanwhile, the shutdown also disrupted the release of key economic data, including employment reports, inflation indicators, and consumer spending data. This not only made it difficult for businesses to judge market trends but also introduced significant uncertainty into the Federal Reserve's monetary policy decisions. Heather Long, chief economist at the Navy Federal Credit Union, pointed out that the lack of data left policymakers "groping in the dark." Under these circumstances, the Fed's planned interest rate cut in December is likely to be postponed.

Furthermore, according to the Congressional Budget Office, this six-week government shutdown will reduce the economic growth rate in the fourth quarter of this year by about 1.5 percentage points, almost halved compared to the previous quarter. Although the reopening of the government may boost GDP growth by 2.2 percentage points in the first quarter of next year, approximately $11 billion in output will still be permanently lost. In comparison, the 35-day partial shutdown in 2018-2019 only dragged down GDP by about 0.02%, making the current impact significantly more severe.

Furthermore, against the backdrop of an economy already burdened by slowing job growth, persistently high prices, and trade policy uncertainty, this government shutdown has placed even greater risks on businesses and households, although most economists still believe a recession is unlikely in the near term.

Finally, this six-week government shutdown has caused multifaceted and irreparable damage to the US economy: approximately $16 billion in federal employee payroll has been delayed; over 10,000 flights have been canceled, resulting in approximately $2.6 billion in losses for the tourism industry; the daily awarding of approximately $800 million in government contracts has stalled; food assistance delays have affected 42 million beneficiaries; the prolonged lack of economic data has forced monetary policy into a passive position; and approximately $11 billion in overall economic activity has been permanently lost, with fourth-quarter GDP growth projected to be dragged down by 1.5 percentage points. Consumption, investment, and public service systems have all been severely disrupted.

In conclusion, this unprecedentedly long government shutdown not only exposed the structural fragility of the US political system in budget disputes but also reflects the highly interdependent relationship between the economy and policy. When government functions are forced to halt, the entire economic chain of society is thrown into turmoil. Businesses are unable to plan, households are unable to consume, and policymakers even lose the most basic data needed to assess the economy. Although the government eventually manages to restart, the long-term loss of trust and the systemic risks it brings will continue to fester. Whether the United States can avoid a similar crisis in the future depends not on economic resilience, but on whether politics can return to a path of rational governance, preventing the administrative system from becoming a victim of political confrontation.

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