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October 5, 2025The first government shutdown in seven years began Wednesday morning, leading to further furloughs and potential job cuts during a year that has been defined by a dramatic slashing of federal spending.
After Congress failed to pass a budget to fund government operations by Tuesday night, all nonessential services and personnel are being shut down.
As with every time the government shuts down, the impact is expected to be felt by federal employees and programs nationwide and have ripple effects on the economy and demand for commercial real estate, especially in sectors like hospitality and retail. The extent of those effects largely depends on how long the shutdown lasts.
But this time could also be different, as President Donald Trump has discussed using the shutdown as an opportunity to make “irreversible” cuts to spending programs, deepening the cuts to the federal workforce that he launched in January with the Department of Government Efficiency.
Around 750,000 federal employees will be furloughed without pay during the shutdown, the Congressional Budget Office estimates, and those workers would likely cut back on spending, leading to nationwide economic consequences. Oxford Economics estimated Wednesday that a shutdown will reduce GDP growth by up to 0.2 percentage points per week.
The damage will be felt most where the federal government is concentrated: in the D.C. region.
The cuts could have dramatic impacts on consumer spending in the region, hurting everything from restaurants and bars to hotels and the Metro system, all during a year when the city has already taken several blows.




