\n \u201cThe current shutdown looks likely to have the greatest economic impact of any shutdown on record,\u201d Alec Phillips, chief political economist at Goldman Sachs, wrote in a recent report.\n <\/p>\n
\n Even if the shutdown ends by next week, it will likely slow down the growth of real gross domestic product (GDP) \u2014 the broadest measure of economic output, without considering inflation \u2014 by 1.15 percentage points during the fourth quarter, according to Goldman Sachs.\n <\/p>\n
\n The nonpartisan Congressional Budget Office estimates the shutdown will reduce GDP by one to two percentage points.\n <\/p>\n
\n \u201cThose effects will intensify the longer the shutdown lasts,\u201d the CBO wrote in a letter<\/a> last week.\n <\/p>\n \n Although \u201cmost of that decline\u201d will eventually be recovered, CBO estimates between $7 billion and $14 billion will be permanently lost during the shutdown.\n <\/p>\n \n Goldman Sachs is now penciling in weaker fourth-quarter GDP growth of just 1%. That would represent a significant slowdown from the 3% or even 4% growth<\/a> that was projected for the third quarter.\n <\/p>\n \n Phillips wrote that the current shutdown is expected to result in a \u201cmuch greater hit to growth than any prior shutdown\u201d because it\u2019s the longest on record and is much broader than previous shutdowns.\n <\/p>\n \n The 2018-2019 shutdown, previously the longest on record at 35 days, was only a partial shutdown, impacting just 10% of government spending, according to Goldman Sachs. The 2025 shutdown, by comparison, has derailed 100% of appropriations.\n <\/p>\n \n The current shutdown also comes at a bad time, said David Kelly, chief global strategist at JPMorgan Asset Management: \u201cThe economy was already going to slow down, and this just made it worse.\u201d\n <\/p>\n \n Kelly cited a range of factors slowing the economy in the fourth quarter, including historically high tariffs, low immigration and the return of student debt payments.\n <\/p>\n \n He added that it\u2019s \u201cshocking\u201d to see \u201chow much public pain (Democrats and Republicans) are willing to inflict just to get a political gain.\u201d\n <\/p>\n \n The precise economic damage from the shutdown is difficult to measure, in part because of the information blackout caused by the shutdown itself.\n <\/p>\n \n \u201cWe are flying blind in this economy,\u201d Kelly said.\n <\/p>\n \n Only one major economic report has been released by the federal government during the shutdown: the September consumer price index<\/a> (CPI), the final piece of data required<\/a> to determine annual cost of living adjustments for Social Security benefits.\n <\/p>\n \n Other data releases, including the all-important monthly jobs report and the Fed\u2019s go-to inflation metric as well as key insights on consumer spending, have been sidelined.\n <\/p>\n \n That\u2019s a major shift from the 2018-2019 shutdown, when the Bureau of Labor Statistics still received funding. That allowed the agency to continue collecting and releasing key economic data.\n <\/p>\n \n Policymakers have been forced to make decisions with limited information. Last week, for the first time ever, the Federal Reserve decided on interest rates without the monthly jobs report<\/a>.\n <\/p>\n \n If the government shutdown continues to limit Fed officials\u2019 visibility, it could persuade the central bank to forgo cutting rates at the December policy meeting.\n <\/p>\n![\"On](\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/11\/gettyimages-2244208855.jpg\")
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