The U.S. government shutdown that began on October 1 could not have come at a worse time for retailers. While the impasse continues, the all-important Thanksgiving weekend is fast approaching – a time when retailers could do with every sense of stability at their disposal. Rather, with each passing day, retailers will need to work that much harder to counter the accompanying uncertainty in order to lure consumers to spend in their stores this holiday season.
Already, confidence has dropped. For the week that ended October 6, Gallup reported that confidence in the economy fell by its second largest margin since the 2008 Lehman Brothers crisis. Perhaps more significantly, the poll indicated that two-thirds of Americans now believe the economy is getting worse. Their outlook is low.
The shutdown has resulted from an impasse over the funding of the Affordable Care Act (Obamacare). Simultaneously, heated negotiations are underway to raise the debt ceiling before the October 17 deadline, a debate that is now being revisited for the third time in the past two to three years.
Granted, while Gallup noted that previous so-called fiscal cliff debates have also been accompanied by a slump in confidence, followed by a subsequent rise when a solution was found, this time may be different given the additional healthcare deadlock.
