Economic winners and losers in the U.S. government shutdown

Finally, after more than 40 days, the longest government shutdown in U.S. history is coming to an end.

On Monday evening, the Senate approved by 60 votes to 40 an interim spending package, maintaining funding for most federal agencies until January 30. The House is expected to pass it as early as Wednesday and send it to President Donald Trump for his signature.

This vote will reopen much of Washington, but not before a wave of damage spreads across the country, with tens of thousands of flights delayed or canceled, 42 million Americans facing disruptions in food assistance, and hundreds of thousands of federal workers and contractors forced without pay.

But economists warn that reopening will not erase the losses. Goldman Sachs cited significant economic impact, likely surpassing any previous shutdown. The Congressional Budget Office estimates that up to $14 billion in output could be permanently lost, affecting fourth-quarter GDP.

Markets appeared to cheer the deal, with the S&P 500 rising 1.5% on Monday alone. But the economy as a whole will take longer to recover. Here is an overview of the distribution of damage – and relief – by sector.

Winners

The defense sector

Despite the shutdown, defense contractors likely continued business as usual, largely because the constrained but isolated Pentagon continued operating as usual. Large defense companies were largely isolated, with most of their operations financed by permanent appropriations. And because the interim bill specifically expands funding for the Department of Veterans Affairs as well as military construction projects, companies in the broader defense supply chain will likely experience higher and smoother cash flows.

Wall Street and shareholders in general

Investors, after enjoying a bull market for much of 2025, still reacted enthusiastically to news of the Senate vote and a possible House vote. The main indices have recovered. The Nasdaq alone rose almost 2%. In recent weeks, prediction markets have been hesitant about whether a data-blind Federal Reserve would continue to cut rates through the end of the year, but now, with a clearer field and easy access to economic data, traders appear to be favoring the likelihood of a third cut in December.

Large manufacturers of agricultural and food products

The Senate deal funds the Agriculture Department, stabilizes farm payments and oversees food security after weeks of uncertainty. For large food companies, this likely means less disruption to inspections and supply chains.

Private credit and concert platforms

It is reasonable to assume that, during the shutdown, some affected households likely turned to buy now, pay later plans, salary advance apps, and gig work platforms to bridge income gaps. This trend could persist for a few weeks as late payments trickle down to checking accounts, temporarily boosting activity among lenders and task-based applications.

Losers

Airlines, airports, tourism

Flight delays have become perhaps the most visible symbol of the shutdown. The Federal Aviation Administration has limited air traffic volumes at major hubs, leading to thousands of flight cancellations, a wide range of routes and delays at regional airports, and an estimated economic loss of $600 million per day, according to Airlines for America. Normal operations won’t resume immediately either, Transportation Secretary Sean Duffy said.

Even after operations resume, airlines expect a holiday season hangover as staffing and schedules normalize.

Federal Workers and Contractors

Some 800,000 federal employees will receive back pay, but it won’t cover late fees, missed mortgage payments or lost contract income. Small government vendors – who are not reimbursed – suffer lasting damage to their cash flow.

Small businesses

Stores and restaurants near shuttered federal buildings saw traffic dry up for nearly six full weeks. Many did not have the cash flow to bridge the gap, and some may not reopen. Hiring at small businesses has likely slowed or stopped, especially among the businesses most directly affected.

Consumers

Disruptions to the Supplemental Nutrition Assistance Program have delayed benefits for an estimated 42 million low-income Americans, temporarily worsening already widespread food insecurity. The shutdown likely also dented consumer confidence heading into the holidays.

Accommodation

Home sales have likely slowed in metro areas with high concentrations of federal workers, from Washington and surrounding areas to Huntsville. Mortgage applications may have been delayed or slowed by the lack of income verification, with some buyers uncertain about their paychecks, while the larger impact on confidence likely rippled through the broader national market of buyers and sellers. Payback can help close some deals, but it’s likely that many of them have already failed.

The economy as a whole

Production lost due to shutdown cannot be easily recovered or recovered. The CBO projects a permanent loss, as well as a potential lingering drag on productivity and hiring through early 2026.

In other words, the rebound in stocks could prove to be another example of a familiar divide – in which Wall Street rebounds first, and Main Street remains on hold.