CHICAGO--(EON: Enhanced Online News)--In the October issue of Themes on the Economy®, Mesirow Financial’s chief economist warns, “The direct and indirect costs associated with the shutdown are expected to shave at least 0.5% from growth over the [fourth] quarter. That number could cross 1% if the shutdown lasts into November.” Swonk goes on to explain that economic conditions are far weaker now then in 1995-96, the last time we experienced a government shutdown due to budget disputes and Congressional gridlock.
“The 2014 round of sequestration will force more job cuts and unpaid furloughs once government reopens. This could lessen the rebound in consumer spending, as those workers will now save more and spend less during the critical holiday season.“”
Consumer spending is threatened as a result. There is more: New cuts required by sequestration are kicking in. “The 2014 round of sequestration will force more job cuts and unpaid furloughs once government reopens. This could lessen the rebound in consumer spending, as those workers will now save more and spend less during the critical holiday season.“
And then there’s the looming debt ceiling to worry about. As Swonk explains, ”Most believe that an actual default on our credit obligations will be averted, but not without a ‘kick the can down the road solution,’ which would keep uncertainty high through year-end.” But in Washington, “Never say never.” Mounting damages could actually pressure members of Congress to work together.
Mesirow Financial is a diversified financial services firm headquartered in Chicago. Founded in 1937, it is an independent, employee-owned firm with approximately 1,200 employees globally. With expertise in Investment Management, Global Markets, Insurance Services and Consulting, Mesirow Financial strives to meet the financial needs of institutions, public sector entities, corporations and individuals. For more information about Mesirow Financial, visit its website at mesirowfinancial.com.