Government Shutdown May Be Extended, Analysts Warn

At 40 days, the US government shutdown is now the longest in history, and analysts warn it could drag on despite some signs of progress.

The shutdown could shave as much as one percentage point off fourth-quarter GDP and push unemployment above 4.5%. (Photo: Emw, Wikimedia Commons) 

Policy experts say a resolution could arrive by Thanksgiving, though further disruptions—especially in air travel—are likely, Anita Hamilton and Adam Clark reported for Barron’s Daily.

Regulators plan to begin cutting flight capacity at airports on Friday. Pressure to end the shutdown is expected to mount as memories of Democrats’ recent election victories fade and public frustration rises, according to Evercore ISI analysts.

Prediction markets Kalshi and Polymarket now expect the shutdown to end next week.

Roughly 1.4 million federal employees are either furloughed or working without pay. Millions more face reduced benefits under the Supplemental Nutrition Assistance Program (SNAP).

The shutdown could shave as much as one percentage point off fourth-quarter GDP and push unemployment above 4.5%, economist David Rosenberg said.

Transportation Secretary Sean Duffy said 10% of flight capacity at 40 airports would be cut beginning Friday if the stalemate persists.

The affected airports, to be announced today, will be in major high-traffic hubs, according to FAA Administrator Bryan Bedford. Analysts said the Democrats’ election wins may strengthen their resolve not to reopen the government until health-care subsidy extensions are approved.

Stifel strategist Brian Gardner wrote that the likelihood of a prolonged shutdown “has increased.”