43 days after it started, the 2025 government shutdown finally came to an end on November 12, 2025. What started as a battle about appropriations for the 2026 fiscal year quickly turned into a tenuous situation that saw 900,000 federal employees furloughed, and another two million working without pay.

While the shutdown largely revolved around government spending, the shutdown’s effect on the economy is expected to go far beyond the problems that the US economy has experienced in the last few weeks. With the government back up and running, federal programs are once again operational, and paychecks are going out as planned. Still, there are some issues that experts are encouraging Americans to look out for when it comes to economic projections in the coming months.

A Shutdown in a Shaky Economy

The 2025 government shutdown didn’t hit a thriving, robust economy. It’s certainly no secret that the US economy has been struggling for quite some time, with inflation rising, interest rates soaring, and employment issues plaguing millions of Americans. Many businesses had already started bracing for lower sales during the holiday season, and other entities were tightening credit conditions before the shutdown hit. Together, these steps compounded uncertainty.

In addition to the numbers, the shutdown also weakened consumer confidence, a driving force in any healthy economy. Business leaders make decisions months in advance, and when there’s so much uncertainty surrounding the national economy, they become far more reserved. Likewise, investors often shift their strategies, focusing on safer asset classes. This drives up borrowing costs and stifles new ventures. While the shutdown has officially ended, the perception that the federal government remains a volatile partner may linger, subtly weighing on economic momentum well into next year.

According to a report published by the Congressional Budget Office (CBO), growth in the fourth quarter is expected to slow by 1.5 percentage points. However, all hope is not lost. Some economic projections point to the possibility that the first quarter of 2026 may see growth of about 2.2 points. Still, that leaves around $11 billion in lost economic activity that there is simply no way to recover.

The Impact of the Shutdown Across Sectors

On the surface, it may appear that a government shutdown only affects lending, investing, and other financial fields. However, that’s not the case at all. Roughly 1.25 million federal workers missed paychecks during the 2025 government shutdown, and when households don’t get paid, their spending slows or stops. Things that seem small, such as going out to dinner or buying new clothes, suddenly turn into propositions that potential spenders decide to revisit later. This drop in spending can have major ramifications, especially for small businesses. It doesn’t take long for that ripple effect to start changing the way that small business owners spend their personal money, creating the perfect storm of financial issues.

The travel industry took a massive hit during the shutdown, as more than 10,000 flights were canceled. The Federal Aviation Administration (FAA) worked to find the money to pay air traffic controllers, but it was simply impossible to keep up. Travel is a time-sensitive concept, and once a flight is canceled and a hotel booking goes unused, that money is usually gone forever. This also has an impact on local businesses that rely on tourists. One report estimates that roughly $2.6 billion was lost from the travel industry because of the shutdown.

Federal procurement and contracts came to a screeching halt during the six-week shutdown. Studies indicate that around $800 million in contracts were lost each day of the shutdown. This not only affects the companies that rely on government contracts, but also impacts their supply chains, vendors, and others.

One of the hidden costs of the government shutdown is found in the economic data that drives policy. Job numbers, inflation readings, and consumer spending all rely on real-time data that is used by policymakers to decide a wide range of economic factors. When that data is stopped by a government shutdown, agencies like the Federal Reserve face what is often called the “fog of war.” As one Fed official put it, “If you’re driving in the fog, you slow down.” This delay can slow down interest-rate cuts, which dampens borrowing and spending.

Finally, it’s impossible to discuss the 2025 government shutdown without mentioning what it did to nutrition-assistance programs like SNAP. Billions in food aid payments were delayed, which not only poses a risk to the families that rely on it but also changes their spending habits.

Bad Timing for a Big Problem

The US economy was already facing immense pressure before the shutdown. These struggles mean that the shutdown added to the existing drag instead of being an isolated blip on the radar. Inflation rates remained elevated, spending slowed even more than it already had, and ongoing concerns about international trade and tariffs were heightened.

Consumer confidence was already lower than it had been in years, with millions of households dealing with fear and uncertainty. When all of this comes together, it makes it clear that the shutdown could not have come at a worse time. The overlap with other stress factors multiplied the risk of this shutdown, leaving millions of Americans reeling, even now that government activity has resumed.

Recovery Isn’t Automatic

Casual onlookers may assume that the government shutdown of 2025 ending means that everything is back to normal, but that’s not the case. Some lost activity will bounce back now that agencies are reopening, and federal employees who went six weeks without a paycheck will receive back pay. Still, that doesn’t mean that all is well.

Most local economies rely on a steady stream of cash to meet expectations. When spending slows down or halts completely, the impact may be insurmountable. There is also fear for consumers who fell behind on bills while working without pay. These are just some of the reasons that government shutdowns are such intricate events.

On a personal level, this is a great opportunity to look at how big-picture events can impact your finances. This shutdown was a powerful reminder of just how interconnected personal finances and government operations are. With it finally coming to an end, spend some time evaluating how you can better protect yourself.