Raw Story

After 43 days, the U.S. government shutdown finally came to an end late on Nov. 12, 2025, when Congress voted through a long-overdue funding bill, which President Donald Trump promptly signed.

But the prolonged gap in government-as-usual has come at a cost to the economy.

The Conversation spoke with RIT economist Amitrajeet A. Batabyal on the short- and long-term impact that the shutdown may have had on consumers, on the gross domestic product and on international trust in U.S. stewardship of the global economy.

What is the short-term economic impact of the shutdown?

Having some 700,000 government workers furloughed has hit consumer spending. And a subset of those workers believed they may not have a job to come back to amid efforts by the Trump administration to lay them off permanently.

In fact, the University of Michigan’s monthly index on consumer sentiment tumbled to a near record low in November — a level not seen since the depth of the pandemic. Because lower consumer sentiment is related to reduced spending, that has a short-term impact on retailers, too.

And because parks and monuments have been closed throughout the shutdown, tourism activity has been down — a decline no doubt worsened by the reduction in flights enforced due to shortages in air traffic controllers.

The effect was particularly pronounced in places like Washington D.C. — one of the most popular destinations for tourists — and Hawaii. This short-term effect will likely extend to secondary businesses, such as hotels. Indeed, prior to the shutdown, the U.S. Travel Association warned that such an event would cost the total travel industry around US$1 billion a week.

And the longer-term impact?

Estimates range, but the nonpartisan Congressional Budget Office has said that the cost to America’s gross domestic product in lost productivity is in the range of $7 billion to $14 billion — and that is a cost from a self-imposed wound that will never be recovered.

And from an international macroeconomic point of view, trust in the U.S. has been hit. Even before the shutdown, political dysfunction in Washington contributed to a downgrade in the U.S. credit rating — something that could result in higher borrowing costs.

The shutdown further erodes the United States’ standing as the global leader of the free market and rules-based international order. Accompanied by the economic rise of China, this shutdown further erodes international investors’ impression of the U.S. as an arbiter and purveyor of the established trade and finance system — and that can only hurt Washington’s global economic standing.

Has the economic pain been felt evenly?

Certainly not. Large numbers of Americans have been hit, but the shutdown affected regions and demographics differently.

Those on the lower end of the income distribution have been hit harder. This is in large part due to the impact the shutdown has had on the Supplemental Nutrition Assistance Program, also known as food stamps. Some 92 percent of SNAP benefits go to American households below the federal poverty line.

More than 42 million Americans rely on SNAP payments. And they were caught up in the political maelstrom — left not knowing if their SNAP payments will come, if they will be fully funded and when they will appear.

There is also research that shows Black Americans are affected more by shutdowns than other racial groups. This is because traditionally, Black workers have made up a higher percentage of the federal workforce than they do the private sector workforce.

Geographically, too, the impact of this shutdown has been patchy.

California, Washington D.C. and Virginia have the highest proportion of federal employees, so that means a larger chunk of the workers in those regions were furloughed. Hawaii has also been disproportionately hit due to the large number of military there. One analysis found that with 5.6 percent of people in the state federally employed, and a further 12 percent in nonprofit jobs supported by federal funding, Hawaii was the second-hardest-hit state during the shutdown.

How easy is it for the US to recover from a shutdown?

Because shutdowns are always temporary, recovery depends on how long it has gone on for. Traditionally, the long-term economic trend is not badly affected by the short-term pain of shutdowns.

But it may be slightly different this time around. This shutdown went on longer than any other shutdown in U.S. history.

Also, the nature of this shutdown raises some concerns. This was the first shutdown in which a president said that backpay was not a sure thing for all furloughed federal employees. And the uncertainty over those threatened with layoffs again broke from past precedent. Both matters seemed to have been settled with the deal ending the shutdown, but even so, the ongoing uncertainly may have affected the spending patterns of many affected.

And we also do not know what the economic impact of the reduction of domestic flights will be.

Have other economic factors exacerbated the shutdown affect?

While the shutdowns in Trump’s first administration did take place while tariffs were being used as a foreign policy and economic tool, this year is different.

Trump’s tariff war this time around is across the board, hitting both adversaries and allies. As a result, the U.S. economy has been more tentative, resulting in greater uncertainty on inflation.

Related to that is the rising grocery prices that have contributed to an upward tick in inflation.

This all makes the job of the Federal Reserve harder when it is trying to fine-tune monetary policy to meet its dual mandates of full employment and price stability. Add to that the lack of government data for over a month, and it means the Fed is grasping in the dark a little when it comes to charting the U.S. economy.

Sen. Tim Sheehy (R-MT) went out of his way to "play hardball" with the White House to get President Donald Trump to back down from his position of pulling Jared Isaacman's nomination for administrator of NASA, Semafor reported on Thursday.

Isaacman, a billionaire entrepreneur and commercial astronaut, is a close friend of tech tycoon Elon Musk, and Trump's initial withdrawal of his nomination was a big factor in the two men falling out spectacularly in public earlier this year. But according to the report, Musk was not the only figure rankled by the change of plans.

Sheehy, per the report, "tried unsuccessfully in May to get President Donald Trump to reconsider his withdrawal of Isaacman’s nomination to lead the space agency. After months passed with still no permanent NASA nominee, Sheehy, a longtime friend of Isaacman, identified a key piece of leverage: the confirmation of a close Trump ally."

Specifically, said the report, "In order to get outgoing personnel chief Sergio Gor quickly approved as US ambassador to India, the president needed all 53 GOP senators to go along. But Sheehy suggested he wouldn’t view Gore’s job of staffing the administration as complete as long as the NASA role was vacant. So Sheehy put a hold on Gor’s nomination in September, a move that has not been previously reported. It didn’t take long to get a response from the White House."

Ultimately, Trump went into talks with Sheehy over the hold on Gor, one of his closest allies. And Trump eventually agreed to re-nominate Isaacman for the NASA position.

This comes after reporting that Transportation Secretary Sean Duffy, currently overseeing NASA on an acting basis, has been maneuvering to try to get the job permanently himself, an issue that caused bitter divisions in the White House.

A Trump administration top housing official has referred a fourth Democratic official and "vocal critic" of President Donald Trump to the Justice Department over allegations of mortgage and tax fraud, according to reports Thursday.

Rep. Eric Swalwell (D-CA) — now the fourth Democratic official to face mortgage fraud allegations in the last several months — could be under a potential federal criminal probe over his Washington, D.C. home, according to NBC News.

In a letter to Attorney General Pam Bondi on Wednesday, Trump attack dog and housing finance director Bill Pulte — who oversees the U.S. mortgage market and also runs Fannie Mae and brother firm Freddie Mac, taking over both company boards and making himself chairman of both organizations — wrote that Swalwell may have made false or misleading statements on his loan documents. The agency's acting inspector general is also reportedly investigating.

Swalwell released a statement to NBC News, explaining he is the latest opponent to face attacks from the Trump administration.

"As the most vocal critic of Donald Trump over the last decade and as the only person who still has a surviving lawsuit against him, the only thing I am surprised about is that it took him this long to come after me," he said.

Trump has repeatedly urged the prosecution of his political opponents, both on social media posts and in speeches.

“Like James Comey and John Bolton, Adam Schiff and Lisa Cook, Letitia James and the dozens more to come — I refuse to live in fear in what was once the freest country in the world,” Swalwell said. “Of course, I will not end my lawsuit against him. And I will not stop speaking out against the President and speaking up for Californians.”

Each of the accused Trump opponents have denied any wrongdoing.

Nick Anderson is a Pulitzer Prize-winning editorial cartoonist.

A woman has come forward to tell her story after the House Ethics Committee determined that then-Rep. Matt Gaetz (R-FL) sexually abused her when she was just 17.

Laura B. Wolf, an attorney for the girl, spoke to The New York Times about the ordeal. The paper got in touch with Wolf after a federal judge in Florida unsealed court documents that described the victim as "a then-homeless 17-year-old high schooler."

Wolf said her client was living with a parent in a homeless shelter and trying to save up enough money to buy braces to fix her teeth when she falsely advertised herself as an 18-year-old on a "sugar daddy" dating website in 2017.

"The vulnerable circumstances most crime victims face are rarely known to the public," Wolf told the paper. "Although my client's circumstances were revealed outside of her control, I hope it helps for the public to see a fuller and more human picture of her than the press has reported on to date."

"Power imbalances can be age, but they can also be financial. My client had little economic security, which allowed for financial leverage over her," she added.

The girl was later introduced to Gaetz through his friend Joel Greenberg, who had sex with her seven times, paying $400 on each occasion.

She would later testify that Trump fundraiser Chris Dorworth witnessed her having sex with Gaetz on a pool table or air hockey table at a party at his home. She also told investigators that she witnessed Gaetz using cocaine that night. She said she was paid $400 for having sex with Gaetz twice that night.

According to the report, the girl eventually saved enough money from the encounters to afford braces.

For his part, Gaetz has denied any wrongdoing.

Republicans are facing their next crisis after getting thrashed in elections last week — voters are seeing slow growth in their paychecks, making President Donald Trump's blindspot on affordability more startling and creating a larger problem for the GOP ahead of midterms.

Americans are feeling pessimistic over their economic futures and concerned over their own financial health, Politico reports Tuesday.

Economists also predict mass layoffs, climbing unemployment, a dip in job opportunities and hesitation among employers to hire new workers and potentially offer raises for current employees.

As wage growth has fallen and inflation rises, it's hitting lower- and middle-income families even harder since the beginning of 2025, according to the Bank of America Institute. These are the slowest rates of income growth seen since the early 2010s, when the economy was bouncing back from the Great Recession (2007-2009) and the unemployment rate was nearly double what it is now.

“We’re clearly going through a soft patch now,” Gary Schlossberg, an economist and global strategist for the Wells Fargo Investment Institute, told Politico. “Households are going to be feeling some pain. [And] if you’re focused on the trajectory of wage inflation, I think it will be slower next year.”

This presents a "serious risk to Republicans" and exposes the weak point the GOP will face in 2026 as they refine their approach and message to address economic woes for Americans.

And while Trump claims inflation is declining, voters don't agree. Since his second term, he is losing the historic advantage he previously had over Democrats, Politico reported.

Only 34% of voters approve of the president's handling of the economy, according to a recent Reuters/Ipsos poll. This figure matches President Joe Biden's polling results during the end of his administration.

Although Trump's administration has argued he will shift his attention to the economy — even offering potential $2,000 checks for low and middle income Americans with tariff revenue — he's also attempting to lower drug prices and suggesting that 50-year mortgages could help reduce costs for people each month.

Tax cuts promised by the Trump administration could bring some relief, but it's expected that those cuts will help the wealthy and give them better purchasing power.

It still won't change that inflation is rising or how Trump's aggressive immigration crackdown could hit wage growth for lower-income jobs often done by immigrants, Recruitonomics Chief Economist Andrew Flowers told Politico.

The reality is that inflation is “worse today than it was at the start of the year, or a year ago,” Flowers argues.