WASHINGTON, 16 October, 2025: The ongoing federal government shutdown in the United States is costing the economy approximately $15 billion per day in lost output, according to Treasury Secretary Scott Bessent. Speaking at a press briefing in Washington on Wednesday, Bessent emphasized that the shutdown, now in its second week, is having significant economic repercussions.
Bessent said the shutdown is beginning to affect the core functions of the economy and warned of deeper consequences if the impasse continues. He also reaffirmed the strength of U.S. investment trends, particularly in sectors such as artificial intelligence and advanced manufacturing, but noted that the disruption is becoming a serious obstacle to ongoing economic activity.
The government shutdown began on October 1, after lawmakers failed to reach a funding agreement before the start of the new fiscal year. It has resulted in the furlough of hundreds of thousands of federal employees, the suspension of many government services, and the delay of key economic data releases.
As of Wednesday, approximately 750,000 federal workers have been impacted. Around 4,000 employees have already been terminated from temporary or contract positions due to halted agency operations. A federal judge in California has issued a temporary restraining order to pause additional layoffs, citing potential procedural concerns.
Lawmakers remain gridlocked with no funding deal in place
In the financial sector, the Treasury Department has yet to release full-year deficit figures for fiscal year 2025 due to the suspension of reporting operations. However, Bessent indicated that the annual deficit was slightly smaller than the previous year, and said the administration remains committed to reducing the deficit-to-GDP ratio over time.
The shutdown has also disrupted a range of public services. The National Flood Insurance Program has halted essential administrative functions, affecting an estimated 3,600 home sales per day in flood-prone regions. Industry reports estimate these delayed transactions could amount to $1.59 billion in daily real estate market losses. Meanwhile, the Social Security Administration has delayed its annual cost-of-living adjustment announcement, originally scheduled for mid-October.
The agency cited the pause in the release of Consumer Price Index data by the Bureau of Labor Statistics, another agency affected by the shutdown. In Congress, Senate Republicans have repeatedly failed to advance a short-term funding bill. The proposal, which includes continued government spending at current levels, has been rejected by Senate Democrats, who have raised objections to the exclusion of healthcare-related provisions.
Federal agencies suspend economic statistics and monitoring
The legislative stalemate has blocked any immediate resolution. Bessent said that despite the shutdown, long-term economic fundamentals remain strong, with ongoing private investment supporting growth. However, he stressed that the continued disruption to federal operations could hamper progress if it is not resolved swiftly.
Several government agencies, including the Census Bureau and the Bureau of Economic Analysis, have suspended their data collection and reporting activities. The lack of current economic data has limited the ability of policymakers, investors and businesses to make informed decisions. The U.S. government has experienced 22 shutdowns since 1976.
This latest lapse in funding is one of the most economically consequential, given the scale of its disruption to daily operations, labor markets and financial planning. Efforts to resume normal government operations remain stalled as congressional negotiations continue without a clear timeline for resolution. – By Content Syndication Services.