"The shutdown could account for up to a $14 billion loss in real GDP, or the total value of goods and services produced by the economy and adjusted for inflation, which won't be recouped, the Congressional Budget Office said Wednesday. A government shutdown usually reduces real GDP temporarily, halting non-essential federal operations, delaying government payments, and cutting spending on services and salaries."
""Although most of the decline in real GDP will be recovered eventually, CBO estimates that between $7 billion and $14 billion (in 2025 dollars) will not be," the report said. During the shutdown, the amount of services provided by federal workers will decrease, spending by the government on goods and services and food assistance like SNAP will temporarily drop as payments are postponed, and a temporary decline in spending by businesses and households will lower economic activity in the private sector, the CBO said."
The shutdown will reach 34 days and approach the longest U.S. government funding lapse. Estimates place a permanent loss to real GDP between $7 billion and $14 billion (in 2025 dollars), with up to $14 billion not recouped. The shutdown reduces government-provided services, delays payments, and cuts spending on goods, services, and food assistance, lowering private-sector activity through reduced household and business spending. Federal outlays are projected to fall by about $33 billion in four weeks, $54 billion in six weeks, and $74 billion in eight weeks. Much economic activity paused during the shutdown will be recovered after reopening.
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