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Economic Forecasts

Expect Aftershocks From the Government Shutdown

The next concern: Economists worry that lawmakers will fail to reach a debt-ceiling deal.

The longest government shutdown in history is now history—but its impact on the economy may linger well into the year.

Consumer confidence is key to a healthy economy because consumer spending accounts for 70% of the U.S. economy. Economists say the shutdown may lead to increased savings and reduced spending among some of the 800,000 federal workers whose paychecks were delayed, as well as the hundreds of thousands of federal contractors and service providers who won’t get back pay. And it may cause others to prepare for a financial shock, too. But the shutdown is unlikely to dampen consumer spending overall, economists say.

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There is one silver lining to the shutdown: Democrats and Republicans in Congress have introduced legislation to ban shutdowns.

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