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Will the Government Shutdown Affect Black Friday Shopping?

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With the government shutdown dominating a lot of the media, a lot of people are wondering how it will affect them. One important aspect that many people are concerned about is how it’ll affect the holiday season. With Black Friday right around the corner, people are wondering if it’s economically safe to spend a lot of money. With this on everyone’s mind, retailers are equally concerned, not because the government shutdown directly affects them, but because it psychologically affects the mind of the consumer. What will happen to our country? Will our taxes be raised in order to compensate? What about those of us with government jobs who are now forced to take a furlough? How will we be able to feed our families and get them presents during the holidays with all of these cutbacks? Questions that any citizen naturally would have during such an event. Hopefully we can clear things up for you.

According to the website of U.S. Customs and Border Protection, all port of entry operations such as cargo security, revenue collections and border security programs, including border patrol and CBP Air and Marine operations will remain operational during the government shutdown. It has been determined that 88% of U.S. Customs and Border Protection employees would not receive any furloughs. According to the Food and Drug Administration however, it has been projected that it would furlough 45% of its employees affecting, among many other things, the monitoring of imports.

Many industry experts believe that no real effect will occur from the shutdown due to no direct impact that government administrations have on the retail industry, aside from import/export procedures and testing of products. However, in order to keep that true, the shutdown would need to be short. The U.S. government has engaged in seventeen shutdowns since 1976. Almost all of these have lasted no longer than a few days at the most. In order for the economy to be significantly affected, the shutdown would have to last more than a week. While the furlough does have a huge impact on about 800,000 federal workers who are now relieved of work and subsequent pay, this only affects a small portion of the economy.

According to the National Retail Federation, import volume is expected to grow 9.1% in October from last year’s results due to retailers bringing in merchandise ordered months ahead of the government shutdown. Overall forecast says that sales in November and December will rise 3.9%, reaching a total of $602.1 billion. All in all, this is a rather significant increase in sales. However, for each week the government remains shutdown, the U.S. economy is projected to lose roughly 0.15% of annualized growth.

For a more in depth look at just what departments are affected by this shutdown, here’s a list of the usual departments to take a hit from such procedures in the past.

  • Law Enforcement Services – Affected departments include child-support, bankruptcy cases and the Bureau of Alcohol, Tobacco, and Firearms.
  • Health Related Services – The Centers for Disease Control and the National Institutes of Health (mostly just the acceptance of new patients for medical research).
  • Museums and Park Services – All national parks are closed down.
  • Regulatory Agency Services – The U.S. Commodity Futures Trading Commission and the Securities and Exchange Commission, along with most of the Environmental Protection Agency.
  • Passport and Visa Services – Visas and passports will not be issued during a government shutdown.
  •  Various parts of Veteran and Social Security Services.

With all of this in mind, unless you personally fall within one of these brackets or are one of the many federal employees who have been furloughed, there isn’t really much to worry about. The Private Sector will continue with business as usual, and so will most citizens. The only instance where most citizens would have to worry would be if the government shutdown lasted a month. Even if such an event occurred, the government would be forced to default on all of its debt, and while short term in may cause many difficulties, it would be better in the long term for everyone to start with a clean slate on the financial board.

We’ll be bringing you the latest 2013 Black Friday News so check back soon for more up to date developments.

Government Shutdown image via Shutterstock