Holiday travel may be affected, but holiday shipments will be unaffected if the government closes a few days before Christmas.
Following President-elect Donald Trump’s stifling of a bipartisan funding package on Wednesday, lawmakers were still frantically trying to come to an agreement by Friday morning that would prevent a government shutdown in the United States at 12:01 a.m. on Saturday.
Under the Trump administration, there hasn’t been a government shutdown since 2019. The Congressional Budget Office estimates that the U.S. economy lost $3 billion as a result of that 35-day budget standoff.
Watch live coverage of the government shutdown.
If a new shutdown were to take place in the next few days, it would be difficult to predict how long it would last. However, major services would continue to operate normally, and these are some of the ways that customers would experience the impact.
Air travelers could see delays
Many passengers had to wait in longer lineups at airports during the 2019 shutdown because some air traffic controllers and security personnel decided not to show up for work. Employees of the Transportation Security Administration are considered vital, which means they must continue to work even in the event that the government shuts down.
However, TSA workers’ paychecks would be stopped without funding, which would cause many of them to stay at home. The TSA has been expecting a 6.2% increase in screening volumes during the busy holiday travel period, which might result in congestion at airport checkpoints.
TSA Administrator David Pekoske said Thursday that although our staff is ready to manage large numbers of passengers and guarantee safe travel, please be advised that a lengthy shutdown may result in lengthier airport wait times.
According to research firm Tourism Economics, TSA officer call-outs at Dallas-Fort Worth International Airport jumped by up to 300% during the most recent shutdown, and the national absence rate among airport screeners increased from 3% to 10%.
Mail and Social Security checks would keep flowing
Holiday deliveries probably wouldn’t be affected, but travelers would encounter difficulties during a closure.
Because the U.S. Postal Service is an autonomous organization that is typically financed by its own sales and services rather than public monies, it continues to operate normally even during shutdowns. The Postal Service stated that it would be able to deliver packages without interruption as a shutdown approached in September 2023 and was resolved just hours before it was scheduled to start.
However, this year’s ground advantage and first-class mail deadlines for deliveries to reach on Christmas Day have already passed. Priority Mail Express’s Christmas cutoff date of December 21 is quickly approaching.
If the government shuts down, the almost 73 million Americans who receive Social Security payments would continue to get their checks. This is due to the fact that Social Security is regarded as a required program that is independent of the ephemeral financing that is up for grabs on Capitol Hill.
However, with agency employees on furlough, anyone who would need to contact the Social Security Administration for assistance may have to wait longer. Since House Republicans opposed increasing funding for the agency in the September deal, its workforce is already at a 50-year low.
Stock markets would digest the fallout day by day
A government shutdown may cause more unrest in a stock market that has had a difficult few weeks, which might increase worry among people who are keeping an eye on their stock portfolios or retirement funds in the run-up to the new year.
Following a 10-day run of losses for the Dow Jones Industrial Average, the longest losing run since 1974, stocks increased Friday morning as investors kept an eye on the unrest in Washington. In mid-morning trading on Friday, the Dow was up about 1% thanks to positive inflation figures.
The investing and tax advisory firm Edward Jones stated in a note that “government shutdowns have historically had little lasting impact on equity performance.” “Stocks were positive half the time during the government closures and were higher in most cases three and six months later.”
However, the possibility of a shutdown aligns with recent indications from the Federal Reserve that it intends to drop interest rates more gradually than first anticipated. The Dow plummeted after the central bank’s announcement on Wednesday, marking the index’s worst trading day since August.
After frequently reaching all-time highs in 2024, Mark Hackett, chief of investment research at Nationwide, stated Thursday that markets were already beginning to fall. He noted that after the S&P 500 set records 57 times this year, the latest declines were a “due” pullback.
In agreement with the Edward Jones analysts, Hackett stated that potential government shutdowns alone often cause a “very short emotional reaction followed by not very much” on Wall Street. The Fed’s decision and the shutdown danger, he continued, have combined to harm an already vulnerable market like “two cans of gasoline being thrown on a fire.”
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