Economic and financial risk insights:
Steady growth and inflation sidestep record US government shutdown
This article was written by Mahir Rasheed, Gioele Giussani
The US government shut down is over, after 43 days, the longest ever. We estimate that it has shaved around 1 percentage point off US GDP growth in the fourth quarter of 2025, and anticipate a mechanical rebound of output lost in the first quarter of next year.
Figure 1: US GDP growth impact of government shutdown
Non-farm payroll data was unavailable due to the shutdown, but alternative labour market data show ongoing weakness, with government-led layoff announcements rising sharply this year.
Figure 2: US layoff volumes