If budget funding does not pass by Wednesday, the government will experience a shutdown. Economically, this news imposes a threat to the release of critical economic data. The Bureau of Labor Statistics will be closed and the release of key economic data would be delayed. Most critically, this includes the September jobs report, the Consumer Price Index, and key wage data. This would effect the operations of the Federal Reserve who rely heavily on these figures for their policy decisions. Additionally, this would more prominently effect investor sentiments and would likely lead to a shake up in the financial markets which respond more instantaneously to current news.
In the past, government shutdowns have not been the catalysts to severe economic issues like recessions; however, this shutdown poses a different threat due to the calls for mass firing of federal workers. This would make an impact as the key issue the Federal Reserve is addressing is the weakening labor market. Mass firing of government employees would lead to a compounding of this issue.
https://thehill.com/business/5526916-government-shutdown-economic-data/
This has been a hot topic over the past couple of weeks and will be very interesting to see what comes up about it on Wednesday. This shutdown would make the fed make policy decisions without any data that could make them cut to aggressively or staying too tight.
ReplyDeleteA government shutdown at this moment would be especially damaging because it would leave policymakers and investors without access to crucial economic data. I agree that this uncertainty could worsen fears of a recession. It feels like political gridlock is creating unnecessary risks for both the economy and everyday workers.
ReplyDeleteIt’s crazy to think a shutdown could delay all the important economic numbers everyone relies on, like the jobs report and CPI, especially right now. Do you think investors will get even more nervous without those updates, or will people just wait until things are back on track?
ReplyDeleteIt will be interesting to see if the government shuts down, the impact on investor sentiment. This could be scary for the economy since we are seeing current consumer spending being largely driven by investors' growth of wealth in the stock market instead of changes in government policy.
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