(MENAFN) The ongoing US federal government shutdown could inflict economic losses ranging from $7 billion to $14 billion, potentially reducing fourth-quarter GDP by as much as 2%, according to the Congressional Budget Office (CBO).

Now in its 29th day, the shutdown shows no immediate resolution. Senate Democrats have pushed for negotiations to extend expiring federal tax credits to support Americans with private health insurance under the Affordable Care Act (Obamacare). Meanwhile, Senate Republicans have urged approval of a stopgap measure to fund government agencies through November 21.

The CBO warned that delays in federal spending on goods and services, employee salaries, and food stamp benefits—which assist low-income Americans—would negatively impact the economy. “The effects of the shutdown on the economy are uncertain. Those effects depend on decisions made by the Administration throughout the shutdown. In addition, how federal employees and contractors respond to the delay in compensation is uncertain,” the agency noted.

According to the CBO, if the shutdown ends this week, the economy would suffer a permanent $7 billion loss. A six-week shutdown ending November 12 would cost $11 billion, while an eight-week shutdown ending November 26 could result in a $14 billion loss.

The labor market would also be affected, as the Bureau of Labor Statistics (BLS) counts most furloughed federal workers as unemployed or on temporary layoff. If all furloughed employees in October were classified this way, the measured unemployment rate would rise by 0.4 percentage points.

This shutdown, the second-longest in US history, began on October 1 following a deadlock over federal spending priorities. Thousands of federal workers have been furloughed, and many government services have been curtailed or suspended.

MENAFN30102025000045017281ID1110269612