US government to shut down after talks on Capitol Hill hit a wall
By Alexander Bueso
Date: Wednesday 01 Oct 2025
(Sharecast News) - Lawmakers on Capitol Hill failed to reach an agreement overnight to avoid a partial shutdown of the US federal government.
So investors were now watching to see whether a so-called temporary funding bill could be clinched in order to stave off a more prolonged and damaging stand-off.
The US President has threatened to use the shutdown as an opportunity to thin the federal workforce.
Historically, stocks on Wall Street had rebounded once the shutdown was over and most of the lost economic output recouped.
However, a spike in unemployment was anticipated if the shutdown lasted for weeks.
Some 750,000 government employees were already expected to be temporarily furloughed as a result of the shutdown.
The most impacted areas of government would be economic data collection and reporting, visitor centres at national parks and monuments and the issuance of small business loans.
Among the former, the release of the September non-farm payrolls report was likely to be delayed.
Republicans needed the support of eight Democrats in the Senate in order to pass a stopgap spending bill to keep government functioning until 21 November.
Thus far only three had flipped, although other Democrats had indicated that they might throw in their support too if the Trump administration entered into serious talks on its proposed healthcare cuts.
President Trump himself appeared to indicate on 29 September that a deal on Obamacare might eventually be possible.
The Senate will take a break on Thursday in observance of Yom Kippur and resume session on Friday.
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