By Victor Reklaitis
How the partial shutdown could affect investments, paychecks, economic reports, benefit programs, tourist sites and more
A partial government shutdown has begun due to a standoff between Democrats and Republicans.
The U.S. federal government has partially shut down for the first time in about seven years, after Democrats and Republicans failed to make a deal on funding before the new fiscal year began at midnight Eastern time.
Analysts had warned that a shutdown looked likely because the two parties have been locked in a standoff over key issues, including an extension for Obamacare subsidies in funding legislation.
So what does it mean for you?
Here’s a rundown of how the partial closure could affect investments, paychecks, economic reports, benefit programs, tourist sites run by the federal government and more.
What the shutdown means for the stock market
This is the first shutdown since the record-breaking closure that ran from late December 2018 until late January 2019. The S&P 500 stock index SPX gained during that period.
That type of market action isn’t unusual. Strategists for Morgan Stanley, Stifel and other firms have made the point that U.S. stocks on average have gained during the shutdowns that took place in recent decades. The strategists have tended to stress that it will be business as usual for much of the country, including for federal workers deemed essential, and that any missed paychecks for Uncle Sam’s employees will come through once the shutdown ends.
No jobs report on Friday
The shutdown is expected to prevent the Friday release of a monthly jobs report. The report on nonfarm payrolls is key for investors and for the Federal Reserve as it decides whether to cut interest rates again.
A contingency plan from the Department of Labor, which releases the jobs report, says economic data will not go out as scheduled in the event of a shutdown. A Department of Labor spokesman on Tuesday confirmed that Thursday’s report on weekly jobless claims also won’t be released.
Holding back IPOs
Companies planning initial public offerings or other stock offerings could be stuck in limbo during the shutdown.
The law firm Cooley warned in a blog post this week that companies that need the Securities and Exchange Commission to “act on their registration statements or interpretive questions are up against a big logistical problem. That’s the case not just while the staff is furloughed, but also afterward, since they have to work through a backlog of submissions.”
The long shutdown that ended in January 2019 had started to “gum up the IPO process,” one expert said at the time.
No break for Social Security, post offices
People enrolled in Social Security, Medicaid and Medicare are due to keep getting their checks and other benefits. However, benefit verification and card issuance are expected to stop until the shutdown ends, according to the Committee for a Responsible Federal Budget.
The U.S. Postal Service will keep delivering the mail, as its day-to-day operations aren’t funded by tax dollars. Amtrak is also expected to continue running.
Paychecks delayed, possible mass layoffs
Federal workers deemed essential – such as military personnel, prison guards and border-security agents – would stay on the job, but hundreds of thousands of others would be furloughed.
About 750,000 federal employees could be furloughed every day, according to a Congressional Budget Office estimate out Tuesday.
Once the government reopens, those who were furloughed or required to work during the shutdown are guaranteed to get paid. However, one nonpartisan watchdog group, the Committee for a Responsible Federal Budget, has noted that federal contractors historically have not received back pay.
What’s more, this shutdown appears on track to be different from past ones in that the Trump White House’s Office of Management and Budget has indicated that agencies could pursue mass layoffs for programs that lack funding.
Read more: How badly could mass layoffs during a government shutdown hurt the stock market?
Economic hit depends on shutdown’s length
The economic impact of a shutdown could be minimal, but it depends on how long closures persist.
Stifel economists said in a note Tuesday that a shutdown – particularly if it’s a prolonged one – “can weigh on the economy and consumers,” in part by “eroding not just confidence but realized activity levels.” They pointed out that the last shutdown, which began at the end of 2018 and lasted 35 days, reduced spending by 0.1%, or $3 billion, in the fourth quarter of 2018, with a further reduction of $8 billion, or 0.2%, in the first quarter of 2019.
“Of course, shutdowns have become somewhat of a regular process over the last decade, arguably mitigating the negative fallout,” the economists added.
From MarketWatch’s archives (January 2019): One potential winner from the government shutdown: Payday lenders
Flight delays could happen again, along with halts to inspections
Air-traffic controllers aren’t paid during a shutdown but are required to keep working, and that led to an increase in the number of controllers who took sick days during the shutdown seven years ago.
Flights into New York City’s LaGuardia Airport were delayed due to staffing shortages, the Federal Aviation Administration said at that time.
So travelers heading to airports may want to brace themselves for possible delays, as well as slowdowns at security checkpoints. The 2019 shutdown led to longer waits at airports around the country after employees at the Transportation Security Administration stopped coming to work, as the Wall Street Journal has noted.
From MarketWatch’s archives (January 2019): Air traffic controllers, pilots warn air safety ‘deteriorating’ due to shutdown
Food and environmental inspections could also be halted. During a shutdown in 2013, the Environmental Protection Agency stopped inspections at 1,200 different sites for things like hazardous waste and drinking water, according to the Committee for a Responsible Federal Budget.
What to expect at national parks
The majority of national parks would most likely be closed, according to guidance issued during a prior shutdown threat.
But that guidance from the National Park Service also noted that there are areas where it’s “impossible or impractical to restrict public access, including park roads, lookouts, trails, campgrounds and open-air memorials,” and so those areas would remain accessible.
There have been instances, such as during the 2018-’19 shutdown, when the National Park Service kept sites open with visitor services suspended, but many places ended up with damage and big piles of trash. Conservationists warned at the time that it could take decades for sensitive lands to recover from the damage.
Greg Robb and Robert Schroeder contributed.
-Victor Reklaitis
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
10-01-25 0002ET
Copyright (c) 2025 Dow Jones & Company, Inc.