Americans are starting to get fed up with the shutdown
Add Axios as your preferred source to
see more of our stories on Google.
The government shutdown is beginning to weigh on public opinion, new consumer sentiment data shows.
Why it matters: Public attitudes toward the nearly monthlong government shutdown are a crucial pressure point on lawmakers, adding incentive to negotiate a reopening — and up till now the public's been largely indifferent.
By the numbers: Consumer confidence, a measure of how Americans are feeling about the economy, was "slammed" by the shutdown over the past week, according to a report Tuesday from Morning Consult.
- "The U.S. government shutdown is exerting significant downward pressure on U.S. consumer sentiment," Morning Consult chief economist John Leer writes.
- Confidence fell 2.6% for all adults on Tuesday compared with a week ago. It fell 4.6% for households earning more than $100,000 and around 2% for those making less money.
- If the shutdown persists into November, the "negative income shock" could rise to $140 billion, annualized, "adding more downside risk to consumer confidence," per a report from Oxford Economics out Tuesday.
- Confidence fell 5% in the 2019 shutdown — the longest in US history.
Zoom in: The Conference Board's sentiment index, also released Tuesday, tracked only a slight decline in confidence in October — with inflation and the job market as top concerns — but its data collection ended about a week ago.
- Some respondents did mention the shutdown in open-ended responses — mostly "neutral" comments complaining about both Republicans and Democrats and the way they can't seem to make a deal, the Conference Board's senior economist, Stephanie Guichard, tells Axios.
Where it stands: Disruption at the airports was a major driver of public pressure to end the 35-day shutdown in 2019. Two similar pain points could emerge soon.
- A growing number of air traffic controller shortages are already disrupting air travel.
- And on Nov. 1, about 42 million Americans— or around 20 million households lose access to their SNAP, or food assistance, benefits.
The big picture: That's many times more people than the hundreds of thousands of federal employees who have been the most affected by the shutdown so far.
- The loss of SNAP benefits could hurt not only those who will struggle to buy food and other goods, but the economy and public sentiment as well.
Zoom out: The SNAP cutoff is "potentially a significant shock to the economy," says Gregory Daco, chief economist at EY-Parthenon.
- SNAP recipients tend to spend all of the benefits they get, a key revenue driver for grocery stores, big box retailers and the broader food industry.
- There's ripple effect outside of food, too: A decline in SNAP benefits leads to a decline in overall spending, according to an analysis from Oxford Economics earlier this year.
Between the lines: Such a large disruption in food benefits and the images of lines at food banks and the like will be hard to miss — potentially sparking public outrage.
- "The evidence of dysfunction is going to be much more visible and much. more salient," Daco says.
Yes, but: Consumer sentiment is fickle and it's difficult to know what really registers for the public, says Bernard Yarros, lead U.S. economist at Oxford Economics.
- In the end, it may still end up being air travel that pushes lawmakers to end the standoff. "I don't see this going much beyond Thanksgiving," Yarros says.
The bottom line: The longer this shutdown continues, the more it will start to weigh on Americans' real lives.
