by Calculated Risk on 9/22/2025 10:58:00 AM
First, shutdowns are expensive, and many government employees continue to work (like the military), but don’t get paid. In the past, all employees who didn’t work were paid in full.
Second, there will be an impact on GDP. Depending on the length of the shutdown, this will negatively impact GDP in Q4.
Third, we will be flying mostly blind without reports on employment, inflation, housing starts and more. However, there will be some private data to fill the gap.
Fourth, for housing, depending on the length of the shutdown, the impact would be on existing home closings in October. If the shutdown lasts for the entire month, I’d expect about a 10% decline in seasonally adjusted sales in October. If the shutdown only lasts a couple of weeks, there would probably be little impact. Some issues could be Tax transcripts, Flood Certs, and SS# Authorization.
Also, a shutdown increases uncertainty, and that might push up mortgage rates (investors hate uncertainty).
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