The economy is also entering the most important season for retailers and consumer spending, the holidays. Uncertainty by consumers may inhibit purchases or cause shoppers to reign in holiday purchases. Retailers will not need to add seasonal staff. If goods are not sold, they do not need to be restocked nor produced, so manufacturers and producers can scale back or not expand production or payroll. Consumer confidence measures have taken a hit during the impasse this past month. Time will tell if this uncertainty carries forward.
Recent releases from the IRS indicate that computer upgrades for the upcoming tax filing season were to occur in October. Due to the shutdown, these upgrades were delayed and may result in the IRS delaying the acceptance of electronic filings by two weeks. Many early filers are due a refund which they, in turn spend. Much like last year, with refunds delayed, spending is delayed. The ripples work their way through the rest of the economy. While the economy feels the ripples of the shutdown the rest of us can shudder at the thought of another round of fiscal policy debates.