“US Government Shutdown, This Time It’s Different”… Concerns Over Warnings of ‘Mass Layoffs’ by Trump

In the past, the impact was ‘temporary,’ but now… Concerns over job insecurity and large-scale layoffs arise,

[Washington=AP/Newsis] On the 29th (local time), CNN reported that while the longest government shutdown in history, which lasted 35 days from 2018 to 2019, did not leave a long-term impact on the US economy and financial markets, the US economy is much more vulnerable this year. The photo shows US President Donald Trump. 2025.09.30.,

[Seoul=Newsis] Reporter Park Miseon = Although the impact of the US federal government shutdown, which paralyzes Washington politics, on the economy is generally limited and often recovers quickly, there are growing concerns that this time the situation might be different.

On the 29th (local time), CNN analyzed that while the longest government shutdown in history lasting 35 days from 2018 to 2019 did not leave a long-term impact on the US economy and financial markets, the US economy is much more vulnerable this year.

Amidst a shaky employment market, the Trump administration’s announcement to reduce federal government personnel could bring additional chaos to an already uncertain economy.

David Kelly, the global chief strategist at JP Morgan Asset Management, stated, “The timing is bad. This time, it’s a bit more risky.”

The Trump administration heightened tensions by mentioning the possibility of massive layoffs of federal employees during the shutdown. Typically, federal employees are placed on ‘unpaid leave’ during shutdowns and receive their wages upon returning to work, but there are concerns that this could lead to actual layoffs this time.

CNN reported that although there is an interpretation that this is a tactic to pressure the Democrats, vigilance is growing as President Trump has made unexpected decisions in the past.

Stephanie Ruhle, a chief economist at Wolfe Research, noted, “If hundreds of thousands are laid off during the shutdown, it would lead to a significant economic problem.” She added, “It might be just bravado from Trump, but he also implemented a 145% tariff on Chinese imports, something no one thought he would genuinely do,” warning of the potential risk.

Usually, if a shutdown continues for a week, the GDP decreases by about 0.2 percentage points, but it recovers quickly once the government resumes operations. However, if actual layoffs occur, it could lead to long-term impacts.

The shutdown also affects the schedule for releasing economic indicators, complicating policy and investment decisions for company CEOs, investors, and Federal Reserve officials. Notably, the September jobs report scheduled for release on the 3rd will not be published, and if the shutdown lasts more than two weeks, it will impact the compilation of October job statistics. The collection of inflation statistics is also halted, making it more difficult to assess the impact of the Trump administration’s high tariffs on inflation.

Despite this, financial markets have not shown major turmoil. Even on the 26th, when the probability of a shutdown this year exceeded 80% according to Polymarket, the New York Stock Exchange rose.

Bob Elliott of Unlimited Funds stated, “As usual, market participants are acting according to the scenario that ‘shutdowns are no big deal,’” but warned, “This time, it might pose a different risk than what we have anticipated.”