The partial government shutdown is having an obvious impact on federal employees—everyone needs to get paid—but it’s also having an increasing impact on businesses, with warning signs coming from a variety of sectors.
Bankers and lawyers are reporting that some planned IPOs are being pushed back because of the partial closure of the Securities and Exchange Commission. Wanted to list shares for the first time this month? Tough luck, biotech firms such as Gossamer and Alector. It looks like this will be a rare January without any major U.S. flotations.
Over to property. The National Association of Realtors surveyed 2,211 agents and found a fifth had clients who were impacted by the shutdown—some were federal employees who suddenly couldn’t pony up the cash; some are just jittery about economic uncertainty. Not good news for a housing market that’s already slowing.
“It’s a completely unnecessary negative,” Association chief economist Lawrence Yun told Bloomberg. “If the shutdown quickly ends, then this will not become an issue. If it becomes prolonged, then it will hurt the economy.”
Defense contractors are also worried. Even though the DOD is funded for this fiscal year, many of the contractors also have deals with currently unfunded agencies such as Homeland Security and NASA. The Aerospace Industries Association (AIA) warned yesterday that State and Commerce Department closures were blocking weapons sales to allies and partners.
“Every day the shutdown lasts, the impacts grow and become more difficult and more expensive to fix,” said AIA chief Eric Fanning.
And to top it all, craft brewers are finding themselves unable to launch new beers, because they need approval from the Alcohol and Tobacco Tax and Trade Bureau, which is, you guessed it, shut down.
Indeed, all kinds of small businesses are facing issues as a result of the shutdown—they can’t get loans from the Small Business Administration because it’s closed; and again, those furloughed federal employees don’t have cash to spend.
Who’s responsible for all this? President Trump may be trying to pin the blame on the donkeys, but new polls suggest voters are fuming at the White House, not the Democrats who refuse to fund Trump’s wall. Politico says 47% of voters blame Trump, while a Reuters survey puts the figure at 51%—both polls say just under a third of respondents blamed congressional Democrats.
For the sake of the economy, something has to give, and soon. And with numbers like those above, it seems increasingly unlikely that it will be the Democrats doing the caving-in.
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