Business
Why the US government has shut down and what happens now
Anthony ZurcherNorth America correspondent and
James FitzGerald
Funding for the US government has been cut off after President Donald Trump’s Republican Party failed to agree with opposition Democrats on a way forward on a spending bill.
The news means that some – but not all – US government services will come to a temporary halt.
Although budget confrontations are common in US politics, this spending fight is especially tense because Trump has spent the last nine months drastically cutting the size of the national government.
Why has the US government shut down?
This situation results from the inability of the two parties to come together and pass a bill funding government services into October and beyond.
The Republicans control both chambers of Congress, but in the Senate – or upper chamber – they are short of the 60 votes they need to pass a spending bill.
Democrats, therefore, have some leverage in this case. They refuse to back a Republican bill, saying it will make it harder for Americans to afford healthcare, and have made this standoff primarily about advancing their healthcare policy goals.
They are calling for an extension of tax credits that make health insurance cheaper for millions of Americans – which are set to expire – and for a reversal of cuts to Medicaid that have been made by Trump. Democrats also oppose spending cuts to the Centers for Disease Control (CDC) and National Institutes of Health (NIH).
A stopgap bill was earlier passed in the House, or lower chamber, but is yet to clear the Senate.
When did the shutdown happen?
At 00:01 EDT on Wednesday (04:01 GMT), it became official: the US would have its first shutdown for nearly seven years.
The last time this happened was at the end of 2018, during Trump’s first term. Both sides made last-ditch efforts to avoid a repeat this time.
On Monday, Trump met all four congressional leaders – the top Democrats in the House and Senate as well as their Republican counterparts. But there was little progress, and both sides appear to have dug deeper into their positions.
On the Republican side, Trump administration officials have been unwilling, so far, to offer any substantive concessions.
They appear to believe Democrats, as the side making demands in exchange for keeping the government open, will bear the brunt of the public’s blame – as they have in some past shutdowns.
Democrats, meanwhile, believe their push for preserving health-insurance subsidies is a popular one.
What is more, their congressional leaders provoked the ire of left-wing activists for backing down during the last budget bout in March. Many Democrats are itching for a bigger fight this time around – and funding the government is one of the only places where their party has some leverage.
What’s different about the White House response this time?
What stands out about this current standoff is the position of Trump’s team.
In the past, long shutdowns were usually seen as politically dangerous, hampering both voters’ everyday lives and the images of lawmakers and the president.
But this time around, the Trump administration appears more than happy to shutter large parts of the US government for an extended period. In fact, officials have threatened to use a shutdown to identify “non-essential” workers who could then be permanently let go.
“We’ll be laying off a lot of people,” Trump said on Tuesday.
Also, after previous shutdowns, government operations mostly returned to normal, with staff and spending levels largely going back to what they had been before, once the standoff was resolved.
Over the past nine months, however, the Trump administration has slashed spending and pushed workers out of their jobs, testing the boundaries of presidential power. A shutdown could allow the administration to accelerate its massive reductions.
What impacts will the shutdown have – including on national parks and social security?
Not all of government will shut down.
Border protection, in-hospital medical care, law enforcement and air-traffic control are expected to continue to operate during the stoppage.
While social security and Medicare cheques would still be sent out, benefit verification and card issuance could stop.
Generally, in a shutdown, essential workers continue as normal – some of them without pay for the time being – but government employees deemed non-essential are temporarily put on unpaid leave. In the past, these workers have then been paid retrospectively.
That means that services like the food assistance programme, federally-funded pre-school, the issuing of student loans, food inspections, and operations at national parks are expected to be curtailed or closed.
There could also be travel delays if the stand-off drags on and unpaid workers stop showing up.
Overall, analysts expect that this shutdown could be bigger than the one in late 2018, when Congress had passed some funding bills. They expect roughly 40% of federal workers – more than 800,000 people – to be put on temporary leave.
How could this shutdown affect the economy?
The scale of the damage will depend in part on how long the shutdown lasts – and how wide ranging it is.
In the past, disruption has tended to be temporary, with any lost activity mostly made up in the months after the shutdown ends.
Analysts estimate a shutdown this time could shave roughly 0.1 to 0.2 percentage points off economic growth for each week that it lasts – though much of that could be recouped.
That relatively muted impact may be why the stock market seems to be shrugging off this latest threat.
But, again, there are some ways that this shutdown could look different.
For one thing, Trump has threatened to fire – not just furlough – some workers, which would make the impact more long lasting.
The fight is also injecting more turmoil into an economy already being roiled by changes like tariffs and artificial intelligence, with the likely delay of key data – such as the official US monthly jobs report – expected to add to the uncertainty.
How common are shutdowns in the US?
Quite common over the past 50 years.
There were three during Trump’s first term, including the longest in history at 36 days, which ended in January 2019. That one was brought about by disagreements over funding a wall on the Mexico border.
The Congressional Budget Office (CBO) estimated that it reduced economic output by about $11bn, including $3bn that it never regained.
Fellow Republican Ronald Reagan oversaw eight shutdowns during his presidency in the 1980s – though all were relatively brief.
Shutdowns over budgets are almost unique to US politics.
Under the US system, the different branches of government have to reach an agreement on spending plans before they can become law.
In most countries, budget votes become votes of confidence in the government itself. But because the US has equal and often divided branches of government, that is not the case.
Business
‘Side Hustle Generation’: Over 50% Of US Gen Z Opting For Extra Gigs Amid Economic Uncertainty
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At least 57% of Gen Z in the US now have side gigs, from retail to gig work, amid economic uncertainty and concerns over the impact of AI on jobs.
Gen-Z is the first generation for whom a 9-to-5 job isn’t essential for achieving financial success. (AI-Generated Image)
Amid widespread economic uncertainty, more than half of the Gen Z population in the United States is opting for side gigs to navigate the job market and for extra cash.
At least 57% of Gen Z in the US now have side gigs, compared to 21% of boomers and older, according to The Harris Poll, which dubbed them “America’s first true ‘side hustle’ generation.”
Most of them are picking up side hustles, from retail to gig work, for extra cash. Younger people “want to work [and] find success, but many of them just feel disillusioned with the opportunities to get there through the traditional career ladder,” Glassdoor chief economist Daniel Zhao told Axios.
Role Of AI
In an August report, Glassdoor researchers said that some of the youths are chasing creative or entrepreneurial goals. Moreover, AI and other technological advances have made it easier for professionals to monetise their skills and passions.
“We’re witnessing a true side hustle generation where work identity lives outside of traditional employment. Additional commentary and research also shows that there’s a growing number of Employee+ workers who diversify income streams without abandoning job security,” Glassdoor said.
“For Gen Z, the day job funds the passion project. Work pays the bills, but identity and fulfilment can come from entrepreneurial pursuits, creative endeavours, or social causes they care about,” it added.
Why Are Gen-Z Opting For Side Gigs?
One of the main reasons for this shift is job anxiety. Recent graduates are struggling to secure jobs, while those with them aren’t seeing the career growth they expect, according to Zhao.
Data shows that the financial optimism for college students has fallen to their lowest level since 2018, mostly due to concerns over unemployment and ‘AI-induced layoffs’. The advent of AI remains the most pressing concern among young workers.
As per The Harris Poll, Gen Z is the first generation for whom a 9-to-5 job isn’t essential for achieving financial success. Side hustles are not merely distractions or fallback options; they are central to Gen Z’s identity, offering creative, entrepreneurial, or activist outlets that main jobs cannot supply.
“It definitely makes me feel more financially secure,” Katie Arce, who works full-time in e-commerce and picks up shifts at a vintage clothing store in Austin, Texas, told Axios.
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United States of America (USA)
January 11, 2026, 17:08 IST
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PM Modi further emphasised that over the past 11 years, India has emerged as the largest data consumer and built the country’s largest real-time digital platform.
PM Modi speaking at the inauguration of Vibrant Gujarat Regional Conference. (PTI)
Prime Minister Narendra Modi on Sunday said that India’s political stability and strong macroeconomic fundamentals are driving global investor confidence, with Gujarat emerging as a key anchor of the country’s growth story.
While addressing the Vibrant Gujarat Regional Conference in Gujarat, the Prime Minister highlighted India’s economic trajectory, saying that the country is the world’s fastest-growing major economy, with inflation under control and a strong foundation for long-term growth. He said that reform express is driving India’s journey to developed nation status.
He highlighted that India is the largest producer of milk and a leading manufacturer of generic medicines, reflecting the country’s growing strength in both agriculture and pharmaceuticals.
VIDEO | Rajkot: PM Modi (@narendramodi) says, “India is the world’s fastest-growing large economy and inflation is under control. Agricultural production in India is setting new records, and the country ranks number one in milk production. India is also the world’s largest… pic.twitter.com/R6f7tDhoZD— Press Trust of India (@PTI_News) January 11, 2026
He noted that global institutions are increasingly bullish on India, with the International Monetary Fund (IMF) describing the country as the engine of global growth.
“India is the world’s 3rd largest startup ecosystem, 3rd largest aviation market, we are in the top 3 metro networks of the world,” he said, asserting that the country is heading to become the world’s 3rd largest economy.
PM Modi further emphasised that over the past 11 years, India has emerged as the largest data consumer and built the country’s largest real-time digital platform. He highlighted that India is now the second-largest mobile manufacturer, whereas earlier the country imported nine out of ten phones.
The Prime Minister also underlined Gujarat’s contribution to India becoming the world’s third-largest economy, noting that the state has grown across sectors. He said regions like Saurashtra and Kutch, once seen as remote, have now become major drivers of Atmanirbhar Bharat and investment-led growth.
Highlighting Saurashtra’s manufacturing strength, with over 2.5 lakh MSMEs producing goods ranging from basic tools to high-precision aircraft components, PM Modi pointed to the region hosting the world’s largest ship-breaking yard and being a major hub for tile manufacturing.
He further said that India’s first semiconductor fabrication plant is coming up in Dholera, with the land ready and a predictable policy environment supporting long-term growth.
Vibrant Gujarat Regional Conference
PM Modi on Sunday inaugurated the Vibrant Gujarat Regional Conference for the Kutch and Saurashtra regions.
The event saw the presence of Gujarat Chief Minister Bhupendra Patel and Deputy Chief Minister Harsh Sanghavi, among other dignitaries.
He also inaugurated 13 New Smart Industrial Estates in 7 Districts (Amreli, Bhavnagar, Jamnagar, Kutch, Morbi, Rajkot and Surendranagar) spanning an area of over 3540 Acres by Gujarat Industrial Development Corporation before his address on Sunday.
The two-day conference summit will highlight Gujarat’s leadership in the clean energy sector and its alignment with India’s ‘Panchamrit’ commitments announced by the Prime Minister. These include achieving 500 GW of non-fossil energy capacity by 2030, meeting 50 per cent of energy requirements from renewable sources, reducing projected carbon emissions by 1 billion tonnes, lowering carbon intensity by 45 per cent by 2030, and attaining net-zero emissions by 2070.
Rajkot, India, India
January 11, 2026, 16:22 IST
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Business
‘You’ve Restored India’s Civilisational Self-Belief’: Mukesh Ambani Praises PM Modi At Vibrant Gujarat
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Reliance Industries chairman and managing director Mukesh Ambani said PM Narendra Modi’s vision has reshaped India’s trajectory for the next 50 years
Reliance Industries chairman and managing director speaks at the Vibrant Gujarat Regional Conferences on January 11, 2025. (Image: Vibrant Gujarat/YouTube)
Reliance Industries chairman and managing director Mukesh Ambani had high praise for Prime Minister Narendra Modi, who inaugurated the Vibrant Gujarat Regional Conference for the Kutch and Saurashtra regions on Sunday.
Ambani said Modi’s vision has reshaped India’s trajectory for the next 50 years, while also restoring the country’s “civilisational self-belief”.
“Most respected prime minister, you have restored to India its civilisational self-belief. Never in history of India have we seen so much hope, self confidence, and so much vibrancy as we do now,” Ambani said during his address at the conference.
Congratulating Modi for the “great honour for Saurashtra and Kutch” that he was personally present, he started his address by referring to the prime minister’s visit to Somnath temple for the ‘Somnath Swabhiman Parv’ earlier in the day.
“Let me start with ‘Jai Somnath’. The positive vibrations from our dear prime minister’s prayers from Somnath are resonating across Gujarat and India. I congratulate our PM for the great honour for Saurashtra and Kutch that he is personally present for the Vibrant Gujarat regional summit (conference). After 20 years in Gandhinagar, we are privileged to take part in the regional summit here in Rajkot,” he said.
Ambani said history will record the “Modi era” as when India moved from “potential to performance, aspiration to action, follower to becoming a global force”.
“Your (Modi’s) vision has reshaped India’s trajectory for the next 50 years and more. History will record that the Modi era is when India moved from potential to performance, from aspiration to action, from being a follower to becoming a global force,” he said.
Calling Modi the “invincible, protective wall” of India, he said the PM is the reason why global challenges cannot “touch or trouble” the country.
“All of us know that the world is changing very fast, the geopolitical situation is creating new challenges including some unexpected turbulence but what is reassuring for India is that these challenges can’t touch or trouble our people. This is because India has the invincible, protective wall called Narendrabhai Modi. Let the world know that this is India’s defining decade, under the PM’s leadership, India’s not just preparing for the future but India’s shaping it,” he added.
Modi inaugurated the event in the presence of Gujarat Chief Minister Bhupendra Patel and deputy CM Harsh Sanghavi, among other dignitaries. The two-day conference will highlight Gujarat’s leadership in the clean energy sector and its alignment with India’s ‘Panchamrit’ commitments announced by the PM.
These include achieving 500 GW of non-fossil energy capacity by 2030, meeting 50 per cent of energy requirements from renewable sources, reducing projected carbon emissions by 1 billion tonnes, lowering carbon intensity by 45 per cent by 2030, and attaining net-zero emissions by 2070.
(With agency inputs)
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Rajkot, India, India
January 11, 2026, 15:43 IST
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