How the government shutdown affected retailers
The government shutdown has dented consumer confidence, as thousands went for weeks with limited pay.
According to the University of Michigan Surveys of Consumers, the Consumer Sentiment Index had a reading of 91.2 in January, down from 98.3 in December. The shutdown was blamed for the overall decline, according to Store Brands’ sister publication, Chain Store Age.
Also, the Expectations Index fell to 79.9, down from 87.0 in December and the Current Economic Conditions Index fell to 108.8 from 116.1 in December, with both also falling to their lowest levels since Trump was elected.
The temporary end of the shutdown had only a small positive impact since the basic issues were postponed, not resolved, said Richard Curtin, University of Michigan economist and director of the surveys.
“The typical impact of such ‘crisis’ events is short lived, with consumers quickly regaining lost confidence,” he said. “That is unlikely to occur this time as the deadline for resolution has only been extended until mid-February. If the standoff continues into late February, it could foster sustained declines in economic optimism among consumers.”