Washington—With the political stalemate in Washington entering another week, business leaders from Wall Street and the Dow Jones Industrials have asked the U.S. Congress to cease their bickering and negotiate. Today, the nation’s retailers added their voices to the chorus.
As the Oct. 17 debt ceiling approaches—and a possible default by the U.S. government looms—the National Retail Federation (NRF) today fired off a letter to both Congress and the Obama Administration urging an end the budget impasse and imploring both political parties to immediately pass a funding bill so that federal employees and contractors can get back to work.
“For retailers–who represent the sector of the American economy most closely tied to consumer attitudes–these numbers are deeply disturbing,” said Matthew Shay, NRF president/ceo. “Moreover, since the very modest growth the U.S. economy has experienced following the 2008 recession has been attributed to the willingness of the American consumer to keep shopping, a lasting decline in consumer confidence is likely to translate into increased unemployment and slower growth in coming months.”
Shutdown Hits Consumer Confidence
What particular concerns the NRF and its member companies from all types of retail is that the falling consumer confidence index occurring now comes at the heels of the start of the holiday season—a season retailers already have been concerned about consumer sentiment even before the congressional crisis.
The latest round of government-sparked economic uncertainty falls much closer to the holiday season. The 2011 crisis took place in July and August, while this one is taking place at least through mid-October. That means consumers will have less time to recoup their confidence from the uncertainty.
Less confident shoppers will be more price-conscious than usual, leading to an increase in comparison shopping and a decline in overall retail revenue.
So far the shutdown has resulted in a lack of economic data and reports to concerns over processing of imported merchandise. Shay noted that the Census Bureau has had to delay employment and retail sales reports, and that other government responsibilities and functions, ranging from Customs and Border Protection to the Federal Communications Commission, have stopped.
“Washington can’t keep governing from crisis to crisis and quarter to quarter,” Shay said. “Kicking the can down the road may be the norm these days in Washington, but it is an irresponsible approach to the problems confronting our nation. …We need leadership from both ends of Pennsylvania Avenue on the key issues facing our country, particularly policies that put the economy on a firm footing for long-term growth.”