AP reader question: How might the federal shutdown affect the economy?
Ducks swim at daybreak in the U.S. Capitol Reflecting Pool during the 8th day of the government shutdown on Wednesday, Oct. 8, 2025, in Washington. Credit: AP/John McDonnell
Here’s a question about the shutdown submitted by an Associated Press reader, Ryan S.:
How might the shutdown affect the U.S. economy?
Shutdowns of the federal government usually don’t leave much economic damage. But the one that started Wednesday looks riskier, not least because President Donald Trump is threatening to use the standoff to permanently eliminate thousands of government jobs, and the state of the economy is already precarious.
For now, financial markets are shrugging off the impasse as just the latest failure of Republicans and Democrats to agree on a budget and keep the government running.
Let’s take a look at a range of possible economic effects:
Also: Trump has threatened to permanently eliminate thousands of government jobs during this shutdown, so if that happens, and new tranches of people are immediately out of work, that can upset an already precarious economy. We just don’t know yet if those layoffs will happen.
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