-3.5 C
New York
Thursday, January 27, 2022

Shutdown Seen Having Minor Economic Impact, Releases Delayed

Shutdown Seen Having Minor Economic Impact, Releases Delayed© Bloomberg. The White House stands in Washington, D.C., on Dec. 21, 2018.

(Bloomberg) — The U.S. economy won’t be hurt much by a possible federal shutdown as long as it’s brief and doesn’t weigh on business and consumer confidence, some analysts are saying, though government reports on housing and trade next week would be postponed.

In a Friday morning Twitter post, President Donald Trump warned of a lengthy partial government shutdown if Democrats don’t back a stopgap spending measure that includes money to build a wall along the U.S.-Mexico border.

The Census Bureau earlier this week said it will delay all data releases if the government shuts down at the end of the day Friday. The Census schedule includes a report on new-home sales Dec. 27, the advance-goods trade balance and inventories on Dec. 28 and construction spending Jan. 3. Other agencies including the Federal Reserve and Labor Department will be issuing reports as scheduled.

Here’s what some economists are saying about the possible economic impact:

Tim Mahedy, Bloomberg Economics

“The direct economic impact from a government shutdown, especially a partial shutdown, is minimal. However, the recent spike in political uncertainty, and the administration’s comments that this shutdown could last for awhile, are a risk to both business and consumer sentiment if current conditions persist.”

S&P Global (NYSE:) Ratings

“Global economists estimate that a selective shutdown would have a modest, if not muted, impact on the $19 trillion economy in real terms. Our earlier analysis said that a full government shutdown could shave approximately 0.2 percentage points ($6.5 billion) off of real GDP in the quarter for each week it drags on.”

William Foster, Moody’s

“A brief shutdown of the U.S. government due to a budget impasse would cause minimal disruption to the economy and would not have a material impact on the U.S.’s sovereign credit profile. In the unlikely case of a protracted shutdown, credit implications would vary by sector and Moody’s would evaluate on a case by case basis, should such a scenario play out.”

Mark Hamrick, Bankrate.com

“A shutdown would further aggravate the frustration Americans already feel about the inability of their federal government to successfully achieve the most basic of functions. It would pile on after the president has repeatedly verbally trashed numerous departments and the fundamental missions of the federal government serving the American people. A shutdown would add, for many, further demoralizing injuries to insults.”

Jim O’Sullivan, High Frequency Economics

“A partial government shutdown, if it occurred, would disrupt the economic data schedule, but it would probably not have any significant impact on broad macro trends. that was the pattern in late 2013, when a shutdown lasted 16 days. There were also two very brief and inconsequential shutdowns earlier this year, in January and February — lasting three days, including the weekend, and less than a full day respectively. As was the case earlier this year, there is no debt default threat this time.”

Omair Sharif, SocGen

“If the government shuts down, this would be a partial shutdown of nine agencies. Roughly 75 percent of the appropriations to fund a number of agencies has already passed both houses, so this is not a total shutdown, as in past years. The nine agencies impacted employ around 420,000 “essential” employees, who would be forced to work without pay until the impasse is resolved (a big chunk of those workers are at the Department of Homeland Security). Another 380,000 government workers would also be furloughed.”

Source: Investing.com

Related Articles

Stay Connected

- Advertisement -

Latest Articles

Popular Articles