Prolonged Government shutdown begins to weigh on U.S. economy

Advocacy update © National Marine Manufacturers Association

The U.S. government shutdown, now in its fourth week, is beginning to strain the economy as economists warn that the longer it continues, the more lasting the effects could be.

Roughly 700,000 federal employees have been furloughed, and nearly as many are working without pay. Economists estimate the shutdown is shaving 0.1 to 0.2 percentage points from quarterly GDP growth each week, driven by reduced consumer spending and lost productivity.

Unlike the 2018–2019 closure, this year’s shutdown affects all federal departments. Trade analysts warn that the continued closure could delay early preparations for the 2026 USMCA review, slow responses in ongoing IEEPA-related tariff litigation, and postpone several agency rulemakings and grant programs tied to manufacturing, clean energy, and maritime safety.

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