Michael Galletly, an employee of the Department of Agriculture in Utah, has recently begun preparing for the financial uncertainty posed by the government shutdown. Galletly, who is also the president of the American Federation of Government Employees Local 4016, noted that he could sustain his expenses for two to three months on savings. However, he expressed concerns over the unknown duration of the shutdown, as he faces the prospect of missing his first paycheck in the coming week.
The shutdown is causing various disruptions, including delays in government approvals and impacts on travel, which have raised alarms about potential broader economic effects. Analysts are observing a decline in business and consumer confidence, which could suggest looming economic weaknesses. Data releases related to the economy, including jobs reports, have been halted, complicating firms’ decision-making processes due to a lack of information.
Galletly reported that he has already altered his spending habits, such as postponing purchases and applying for unemployment insurance. In parallel, an analysis estimates that the economic impact of the shutdown could reach $15 billion per week, primarily affecting federal workers and contractors. There is concern that the Trump administration’s unprecedented strategies, including potential denial of back pay, may exacerbate the situation.
Recent estimates indicate that if the shutdown persists, the unemployment rate could rise to 4.8% by mid-October. The White House Council of Economic Advisers projected that a month-long shutdown could result in a $30 billion decrease in consumer spending, particularly affecting government contractors.
The shutdown’s ramifications extend beyond federal employees, with significant effects anticipated in the Washington, D.C. area. During the last major shutdown in 2013, consumer spending in the D.C. region fell significantly, shedding light on the interconnected consequences of such disruptions on local economies and communities.
Source: https://www.bbc.com/news/articles/c9861edyjlno?at_medium=RSS&at_campaign=rss