That economic effect compounded for some 33,000,000 small businesses in ways other than at the checkout counter.
For federal employees, beyond the worry of working without pay or on furlough.
The promise from President Donald Trump of mass firings and irreversible cuts to programs important to democrats.
What we know:
With the federal government shutdown and more than 500,000 furloughed. Potential terminations are looming.
President Donald Trump posted on Truth Social that he was meeting with his budget director to determine which agencies he recommends being cut and whether those cuts will be temporary or permanent.
Before the shutdown started, the Trump administration sent a memo to federal agency department heads.
The memo says to consider a reduction in force where:
Discretionary funding lapses on October 1, 2025.
Another source of funding is not currently available.
Programs, practices and activities not consistent with the president’s priorities
Local perspective:
“The legal justification the administration is using is saying, look, if something has run out of money, you have the authority under federal regulations to have a reduction in force,” said Constitutional Law Attorney, David Coale.
“They’re trying to take that law and kind of spoon into it the potential financial effect of the shutdown on agencies, some of which are pretty low on cash given the events of the early days of this administration when there were a lot of rollbacks in federal funding.”
Dig deeper:
Dan Varroney is an economic performance analyst and author of the book Re-Thinking Economic Growth: How Small Businesses Can Help Consistently Grow the Economy.
“When I think about the economy, I think about small businesses,” said Varroney.
For small businesses, the shutdown brings unintended consequences.
“I think about the ability to get federal loans, or to move forward with loans, or process your paperwork for loans. That has stopped.”
Before factoring furloughs and future firings…
“You’re absolutely losing momentum. The momentum you had from loans from contracts from customers coming into your door has been slowed or stopped, and it takes time, like two or three months, to build it back up,” said Varroney.
What’s next:
Varroney estimates $3 billion lost out of the economy in the last shutdown, during the first Trump administration, was never recovered as business got rolling at full speed again.
That shutdown was the longest in history, lasting 35 days.
Lots of people hoping the government reopens soon and very soon.