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As US shutdown starts to bite, how much could it hit economy?

October 15, 2025

The ongoing government shutdown has forced federal workers like Michael Galletly to strategize for survival through unpaid leave, with many expecting to miss their first paychecks this week. As workers curtail spending, the economic impact is beginning to spread beyond government operations, with analysts projecting a hit of approximately 0. 2 percentage points to quarterly growth per week, equivalent to about $15 billion.

Who is affected

  • Federal workers and their families who face missed paychecks and financial uncertainty
  • Government contractors who are not eligible for back pay
  • Businesses that rely on government workers as customers, especially in the Washington, DC region
  • Consumers experiencing delays in government approvals for permits and loans
  • Museum visitors affected by closures
  • The broader public impacted by suspended economic data releases and reduced government services
  • Businesses and policymakers dealing with increased economic uncertainty

What action is being taken

  • Federal workers like Michael Galletly are applying for unemployment insurance and contacting banks about accommodating delayed mortgage and car loan payments
  • Affected households are cutting back on spending and postponing major purchases
  • The Trump administration is reshuffling government payments to ensure military members continue receiving pay
  • The administration is maintaining funding for certain key food programs
  • Businesses near government facilities, like Duke's Counter restaurant near the National Zoo, are experiencing and responding to significant drops in sales

Why it matters

  • The shutdown could reduce quarterly economic growth by 0.2 percentage points per week (approximately $15 billion)
  • If extended to mid-October, the unemployment rate could rise to as much as 4.8% from 4.3%
  • A month-long shutdown could lead to the loss of $30 billion in consumer spending
  • The economic impact is amplified by its collision with an already slowing economy and other economic concerns like tariffs
  • The administration's measures to blunt economic pain may actually extend the shutdown by removing pressure points
  • The delay of economic data releases increases uncertainty and risk of policy errors
  • The Washington, DC region faces particularly severe economic consequences

What's next

  • No explicit next steps stated in the article

Read full article from source: BBC