Prolonged Government Shutdown Begins to Weigh on U.S. Economy
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.
Oxford Economics estimates that about $800 million in new federal contract awards are being disrupted each business day. While some of that activity may recover once the government reopens, an extended shutdown could cause permanent financial losses for contractors and further delay federal programs.
The ripple effects are also being felt across the recreational boating industry. Coast Guard certifications, EPA reviews, and federal boating safety grant awards could face delays as agency staff remain furloughed. Reduced household income among affected federal workers may also weaken short-term demand for boats and marine accessories.
To discuss the impacts of the government shutdown with NMMA staff, please reach out to [email protected].
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.
Oxford Economics estimates that about $800 million in new federal contract awards are being disrupted each business day. While some of that activity may recover once the government reopens, an extended shutdown could cause permanent financial losses for contractors and further delay federal programs.
The ripple effects are also being felt across the recreational boating industry. Coast Guard certifications, EPA reviews, and federal boating safety grant awards could face delays as agency staff remain furloughed. Reduced household income among affected federal workers may also weaken short-term demand for boats and marine accessories.
To discuss the impacts of the government shutdown with NMMA staff, please reach out to [email protected].