More than 3 hours that the US government has been officially shut down since 2018, but here is what you should be aware of:
1. This also means several buildings (not all) are closing down, and if this shutdown is prolonged for more than 3 weeks, then the unemployment rate could spike to 4.6%-4.7%, up from 4.3%, according to a Bloomberg Economics source. Especially when Trump last threatened the mass, irreversible firing of federal workers.
2. Some workers will halt, and some essential ones will continue the operation—with or without pay. This not only leads to mass layoffs but also weakens wage growth.
3. And if layoffs increase along with some disruption in service delivery, then this will lead to financial stress, dent the spending, and dampen the overall economic growth. This will also leave the FED no choice but to ease further, or possibly result in a dovish tone from them.
→ This layoff and rate cut could be a positive message for Trump, as this will serve as a chance for him to fill in his people (opinion only).
However, as per the Congressional Budget Office, “the level of real GDP in the fourth quarter of 2018 was reduced by 0.1 percent.”
4. Several economic indicators—including this week’s job data—will likely be postponed from release, just like what happened in 2018. For now, there is no official update on this part yet. And if there is no official update to delay at a later time, then do watch out for the ADP employment changes and ISM Manufacturing Purchasing Managers’ Index tonight.
5. Be extra careful of the stock market tonight at 8:30 PM Cambodia time, as this could result in a big move.
For now, there is no further update from the Whitehouse regarding more detailed insights or guidance adjustments; however, do note that if the 2018 shutdown (more than 30 days shutdown) comes now, this will only result negative outcome for the US economy.
