(The Center Square) – The longest U.S. government shutdown in history reportedly cost Nevada an estimated $140 million in gross production per week, but the state’s chief economist now argues the losses could be far less painful.
Nevada’s economy suffered an estimated $2.4 billion initial price tag for last fall’s federal shutdown, according to the White House. Much of the cost came from lost wages that have since been paid.
But the knock-on effects for lost contracts, delayed social programs and wages reportedly hit the local and national economy.
“There’s probably still some impact because a person who’s not able to buy groceries is going to impact that grocery store,” said David Schmidt, chief economist with the Nevada Department of Employment, Training and Rehabilitation.
“That impacts the people that work there,” Schmidt told The Center Square. “There’s still delayed impacts.”
Most of Nevada’s roughly 22,000 federal employees (1.4% of the state’s workforce) stayed at home or were forced to work without wages during the 43-day shutdown. These employees rake in well above the state average at $88,756 a year, according to World Population Review.
Schmidt said the lost wages likely resulted in lower spending and missed payments during the country’s longest federal shutdown.
“When you’re in the middle of the shutdown, people are not receiving paychecks and people are not receiving benefits. There’s a lot of economic impacts that take place,” the economist said. “But those are in real time, and once the shutdown ends and back-pay, back-benefits – things like that get paid out – a lot of those costs end up being mitigated to a high degree.”
The federal government has not released an estimate on the total lasting impacts of the 2025 shutdown, and The Center Square was unable to find any reputable third-party estimates. Schmidt roughly estimated the total economic impact to be less than 10% of initial $2.4 billion estimate for Nevada.
The White House said that “the full effects of the shutdown cannot be isolated.” But the federal Bureau of Economic Analysis estimated the unpaid federal wages during the shutdown reduced the U.S. gross domestic product by 1%, according to the bureau’s 2026 economic report.
But beyond employee wages, the shutdown also disrupted social programs, namely the Supplemental Nutrition Assistance Program. SNAP payments for November were only partial and took some extra time to be delivered to recipients. Schmidt said the financial impact of this would be difficult to quantify, but that it probably would have a lasting impact on the local economy.
The White House report also estimated 400 jobs would be lost as a result of the longer term shutdown effects. Schmidt said while that might be true, Nevada has seen job growth in recent months.
“Through the shutdown period, Nevada’s total job performance was among the best in the nation,” he said.
Small business loans totaling around $39 million per month by the federal government were also paused during the shutdown, but have since been back-paid.
Contracted work likely took some of the largest economic hits in Nevada, with back-pay likely not included for most contracted work with the federal government.
“A temporary worker who’s been contracting with the federal government to provide a particular service, they might get the short end of that stick,” said Schmidt.
The White House estimated $105 million in contracted work would have been cut during the first month of the shutdown in Nevada.
While the Nevada economy is still healing from the 2025 federal government shutdown, the federal government is once again in another shutdown. The ongoing partial-shutdown applies only to the Department of Homeland Security, but has passed 70 days since Feb. 14. DHS includes employees of the Transportation Security Administration, U.S. Immigration and Customs Enforcement, and the Federal Emergency Management Agency.
Last week, U.S. Secretary of Homeland Security Markwayne Mullin said the reserve funds the department is currently funding employees through is going “extremely fast,” adding that the department would run out of funds in early May.
Schmidt stressed federal employees that go unpaid during a government shutdown can file for unemployment benefits, including TSA workers.
“You can file for unemployment benefits. Just know that if and when you get your back-pay, you’re going to have to pay them back,” said Schimdt. “Which in a sense then ends up functioning as a kind of loan … to help keep them able to buy some groceries and take care of some essential needs.”
