"Last week, the federal government shut down, with both Republican and Democratic plans to finance ongoing appropriations failing to garner enough votes to pass the Senate. Donald Trump did not seem overly worried about the situation, calling it an "unprecedented opportunity" to throttle funds going to blue states and fire federal employees. The stock market surged higher and the bond market did not react. But up to 750,000 workers will be furloughed, losing out on $400 million in wages a day."
"No, one might say, of course not: GDP is rising at a strong 3.8 percent a year. Yes, certainly, another might argue: Businesses have been on a months-long hiring freeze and the jobless rate is starting to tick up. No: The country is in the midst of a massive technology and infrastructure boom. Yes: Confidence is sinking, wage growth is slowing, and default rates are rising."
A federal shutdown furloughs up to 750,000 workers, costing about $400 million in wages per day, while the stock market rose and bonds remained calm. Analysts estimate each week of closure reduces the quarter's annualized GDP growth by 0.1 percentage point, and the White House projects a month-long shutdown could eliminate 43,000 jobs. Economic indicators are mixed: headline GDP is strong at 3.8 percent, but hiring freezes and a rising jobless rate coexist with a technology and infrastructure boom. Confidence and wage growth are weakening, default rates are rising, and the Fed is cutting rates; consumer spending remains resilient despite high prices.
Read at The Atlantic
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