Neil Irwin notes today that consumer confidence took a sharp downward turn in October. But it’s not clear if this will have any real effect on the broader economy:
Turns out, shutting down the government for 16 days while using the threat of a government debt default to battle over the nation’s budget isn’t great for peoples’ psyche
….It’s worth remembering that measures of confidence are always far more volatile than the actual amount of money Americans spend….So there are no guarantees that the plummeting consumer confidence will materialize into worse economic results for October. Still, coming off of a slew of weaker-than-expected data, it’s hard to imagine that the wallop that consumer confidence took in October will help matters.
Yep. If Republicans get down to business and agree to pass a simple budget by the end of the year, the effect of the October debacle will probably be limited. But if we go through the exact same thing again in January? Then all bets are off.