Government Shutdown 2025: What It Means for Your Money

newlegacytaxes
Oct 3
2 min read

The federal government has officially shut down after lawmakers failed to reach an agreement on a funding bill. While politics drive the headlines, let’s focus on what this means for your wallet, investments, and financial planning.

What Stays Open and What Shuts Down

Even during a shutdown, essential services continue:

Still running: Social Security, Medicare, Medicaid, VA benefits, TSA, federal courts, and postal services.
Temporarily halted: Some national parks, the Small Business Administration (SBA), and federal economic data collection.

Delayed Economic Data

One of the biggest financial impacts is the delay in key economic reports:

Jobs Report: Originally scheduled for October 3rd, now postponed indefinitely.
Inflation Report (CPI): Scheduled for October 15th, but likely delayed too.

This matters because the Federal Reserve relies on these reports to guide interest rate decisions. If the data isn’t available before the next Fed meeting on October 29th, the Fed may have to make decisions in the dark.

Impact on Social Security COLA

The Social Security Administration typically announces the cost-of-living adjustment (COLA) in mid-October. That announcement may be delayed if inflation data is not available. Important: Payments will still go out on time in 2026. The only issue is waiting longer to know the official adjustment amount.

Stock Market and the Dollar

Historically, shutdowns have had minimal effect on stocks. On average, the S&P 500 has gained about 0.3% during shutdown periods.

The bigger story is the U.S. dollar: shutdowns often weaken it. A weaker dollar tends to benefit commodities like gold and silver, which could be good news for precious metals investors.

Federal Employees and Pay

750,000 workers furloughed: Placed on leave without pay.
Essential workers: Must continue working but won’t be paid until the shutdown ends.
Back pay guaranteed: Once the government reopens, employees will be paid retroactively.
Congress: Members of Congress still receive paychecks, a point of frustration for many.
USPS: Continues to operate and pay employees, since it is self-funded.

Economic Impact

The overall impact on the economy is expected to be minimal, since federal employees eventually receive back pay and government spending resumes once operations restart.

How Long Could This Last?

The average shutdown in the past 50 years lasted about 8 days.
This one could be short-lived—or drag out longer depending on negotiations.
The sticking point: disagreements in the Senate, where Republicans hold a majority but need Democratic support to pass funding.

For most Americans, essential benefits continue, but delayed economic reports could complicate Fed policy and financial planning. The shutdown may create short-term uncertainty for the dollar and commodities, but history shows little impact on the stock market or economy overall.