by Bill McBride on 10/11/2013 01:41:00 PM
Friday, October 11, 2013
Many workers and businesses, including thousands with no direct government funding, are now bracing for a stark reality: protracted financial pressure if the federal government remains closed for longer.Yesterday I posted some information on the impact on hotels. The shutdown is also hurting restaurants and retailers.
The prospect of an extended disruption—as House Republicans' latest proposal Thursday could allow—is starting to sink in as people across the U.S. already face lost wages and profits from the nearly two-week shutdown.
"We're just going to limp along," said Rebekah Klein , owner of Emma's Tea Room, a cafe in Huntsville, Ala., which serves many workers with jobs at the nearby Army operations and NASA's Marshall Space Flight Center and which has lost business as a result of the federal closure.
Nationally, economists forecast each week of a shutdown will subtract about 0.1 to 0.2 percentage point from this quarter's annualized pace of economic growth, which has been running at about 2% a year.
But communities across the U.S. are facing a more substantial impact. In Huntsville, for instance, federal employees account for almost 18% of all wages, according to an analysis of government data by Jed Kolko, chief economist at the real-estate firm Trulia.
It is time for the House to end the shutdown. They are hurting the economy.
UPDATE: Another article from the Financial Times: Shutdown starts to bite for US businesses
The evidence is anecdotal, in part because many government statistical agencies have themselves shut down, but the falling sales are real.
Costco, the warehouse retailer, said that it had seen “some effect downward” on sales around Washington ... Richard Galanti, Costco’s chief financial officer, told analysts this week that the company was “scratching our head in disbelief” over the political deadlock. One analyst replied: “We’re all getting bald doing that.”
posted with permission
Posted by Bill McBride on 10/11/2013 01:41:00 PM