October Market Update

Traditions Wealth Advisors
Jade Chapman/Brien L. Smith CFP®
Economic Analyst Intern/Chief Investment Officer
October 27, 2025

Economic costs of shutdowns
According to the Committee for a Responsible Federal Budget, government shutdowns typically cost more money than they save, contrary to some public perceptions.[9] Evidence shows that implementing contingency plans, lost user fees, contractor premiums for uncertainty, and guaranteed back pay to furloughed employees negate potential savings. The Congressional Budget Office estimated that the 2018-2019 shutdown reduced GDP by $11 billion total, including $3 billion that would never be recovered.[42]

The Office of Management and Budget estimated that the 2013 shutdown resulted in $2.5 billion in pay and benefits paid to furloughed employees for hours not worked, as well as roughly $10 million in penalty interest payments and lost fee collections.[9] A 2019 Senate report found that the three government shutdowns in 2013, 2018, and 2019 wasted nearly $4 billion of taxpayer dollars.[8]

During shutdowns, the government incurs costs for:
          ·        Putting contingency plans in place
          ·        Lost user fees and other charges that are not collected
          ·        Contractor premiums included in bids to account for payment uncertainty
          ·        Back pay to furloughed employees who were forced to remain idle
          ·        Reduced private-sector investment and hiring due to inability to obtain federal                       permits, certifications, and loans

Overview of shutdowns involving furloughs: