How the Government Could Put a Damper on the Holidays

How the Government Could Put a Damper on the Holidays

With the economy continuing to improve, it’s probably no surprise that Americans plan to ramp up their holiday shopping this year.

According to a new forecast by the National Retail Federation, sales in November and December will rise 3.9%—to a total of $602.1 billion. Since the average growth of holiday sales over the past ten years is around 3.3%, the estimate seems to indicate that Americans clearly must be feeling more confident about the economy.


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That is, if the current government shutdown doesn’t get in their way. As the Associated Press reports, those predications were calculated before the events of Monday night, when Congress failed to pass a spending bill, sending many government workers into furlough and shuttering a host of government services.

So while shrinking unemployment numbers and a housing market on the mend are responsible for the uptick in Americans' economic optimism—and thus, those forecasted holiday spending numbers—a government shutdown that lasts for a while could unravel all that optimism.

RELATED: What Real Moms Spend During the Holiday Season

And since those holiday months can account for up to 40% of retailers' annual sales, the uncertainty in Washington certainly has businesses and economists worried. David Stockton, the former research director at the Federal Reserve, told the Associated Press that for every week the government is shut down, the U.S. economy could lose 0.15% of annualized growth.

Although for now the government remains shuttered, as politicians battle it out in Washington, the National Retail Federation is optimistic that the shutdown will be over well before Thanksgiving weekend. With any luck, the government won't be such a grinch come holiday season.


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