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Congress blew past a midnight funding deadline, triggering the US government’s first shutdown in nearly seven years — and the third under President Donald Trump.
The White House’s budget office ordered agencies to begin executing their plans for a funding lapse, shuttering the government aside from essential duties, disrupting the jobs of hundreds of thousands of Americans and upending many public services.
With the two parties locked in a stalemate over health care subsidies and using the moment to frame the 2026 midterm elections, the shutdown — and its economic effects — could be prolonged.
If the shutdown lasts three weeks, the unemployment rate could spike to 4.6%-4.7% from the 4.3% in August as furloughed workers are counted as temporarily unemployed.
Much of the economic impact from a government shutdown historically has been recouped after it ends, but not all.
The Congressional Budget Office estimated that the US economy didn’t recover $3 billion of the $11 billion in reduced economic output during the partial government shutdown in 2018-2019, which spanned five weeks and was the longest in US history.
The shutdown would also delay key economic data like the Bureau of Labor Statistics jobs report due Friday. The Federal Reserve is closely monitoring economic data as it weighs changes to interest rates and would operate without critical data during the closure.
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