Federal Shutdown Could Hit Central Minnesota’s Economy Hard

The Federal Government shutdown continues in the United States. St. Cloud State Economist King Banaian joined me on WJON to discuss the affects it may have on Central Minnesota residents if it lingers deep into November.

Immediate Impacts

Banaian says the two immediate impacts are the loss of SNAP benefit distributions in November and the continued lack of pay and possible furlough for some Federal employees. He says the V.A. is a large employer in the community and those individuals may have less money to spend in stores and on vacations. Banaian indicates grocery stores could be hit with less traffic and food shelves could be flooded due to the lack of SNAP benefits.

Lingering Shutdown?

If the shutdown lingers, Banaian believes the affect on the economy will grow. He says if the shutdown continues up until Thanksgiving, it will shave a half to 1% off GDP in the 4th quarter. Banaian predicts the shutdown will be done by Thanksgiving but if lingers into December he's very concerned.

Health Care

Healthcare insurance and healthcare costs are expected to rise in 2026. Banaian says those numbers will become real for everyone as open enrollment time gets started in early November. He says the new safe and sick leave regulation will be impactful in 2026 as well. Banaian is concerned companies and businesses may limit the amount of employees they have due to the high cost of healthcare. He suggests some positions will go unfilled and layoffs could become more prevalent.

Don't Panic

Banaian doesn't believe now is the time to panic. He says there are some signs of economic struggles ahead but some of these could be averted. Banaian believes the large amount of layoffs announced by National corporations are offset by a close to equal amount of new jobs available.

If you'd like to listen to my conversation with King Banaian, click below.