The shutdown, which already ended  late Wednesday night after 16 days had tremendous lost. Approximately  $24 billion out of the U.S. economy, and reduced projected fourth quarter GDP growth from 3 percent to 2.4 percent. The government had a huge impact in it GDP.  The unfortunate lost consist of; About $3.1 billion in lost government services, according to the research firm HIS $152 million per day in lost travel spending, according to the U.S. Travel Association $76 million per day lost because of National Parks being shut down; the National Park Service   $217 million per day in lost federal and contractor wages in the Washington D.C.                                                                                                                                                                       

 Thousands of federal workers bore the economic impact of the shutdown but small businesses also suffered from frozen government contracts and had to stop business loans. With the deal which only guarantee government funding through January 15, the situation could grow worse. “This is  real corrosion on the economy” says Mark Zandi, chief economist for Moody’s Analytics.

Before the shutdown The U.S. economy’s growth picked up in the second quarter, helped by a smaller-than-expected impact from federal budget cuts. According to the Commerce Department, Commercial real estate investment and a reported buildup in inventories by businesses were also major contributors to the quarter’s growth. In addition,  Building of new factories and offices climbed at a 6.8% annual pace. Inventory growth added 0.4% to the economy’s size, the department said.                                                                                                                                                                                                Consumer spending was held back partly by the increase in payroll taxes at the beginning of the year. The largest part of the economy, it rose at a 1.8% annual clip, down from 2.3% in the first quarter.                

 Ultimately, the economic growth and it GDP illustrates have a large effect on nearly everyone within that economy. The U.S economy grew at an annual pace of 1.7% between April and June, Commerce said. The government revised down its estimate of first-quarter growth to 1.1% from 1.8% annual rate it had reported. The average for the past 12 months remained at 1.4%.

 Price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 0.2 percent in the second quarter, 0.1 percentage point less than the second estimate; this index increased 1.2 percent in the first quarter.  Excluding food and energy prices, the price index for gross domestic purchases increased 0.8 percent in the second quarter, compared with an increase of 1.4 percent in the first.

 GDP is probably the best measure of the overall state of the economy because it includes the output of all sectors of the economy. Based on the Bureau of Economic Analysis, the output of goods and services produced by labor and property  in the United States increased at an annual rate of 2.5 percent in the second quarter of 2013

Read more: http://www.businessinsider.com/government-shutdown-impact-on-gdp-growth-2013-10#ixzz2jI6MVVbm

Government Shutdown Cost $24 Billion, According to Standard & Poor’s | TIME.com

http://swampland.time.com/2013/10/17/heres-what-the-government-shutdown-cost-the-economy/#ixzz2jHtc9WII

Read more: http://www.businessinsider.com/government-shutdown-impact-on-gdp-growth-2013-10#ixzz2jI2mzUZm

Read more: http://www.businessinsider.com/government-shutdown-impact-on-gdp-growth-2013-10#ixzz2jI4yJEFi

Unemployment Decreased By 522,000 Since June 2013

Written by Ashley Bazile

New York – In September, the United States government added 148,000 jobs and the unemployment dropped to 7.2 percent.

On October 22^nd, 2013, the Bureau of Labor Statistics (BLS) released “The Employment Situation – September 2013”. In this news release, the BLS reported that as of October, unemployment has decreased by 522,000 since June 2013.

As the percentage has dwindled down since September 2011 to September 2013, it can only be expected that the unemployment rate will continue to decrease over the coming years.

Overall, the statistics that go into formulating the unemployment rate have changed. These statistics include people who have been unemployed for 27 weeks or longer continually to people who were employed partially. Both groups of people had their numbers decreased. The long term unemployed group had their decreased by 725,000 from 4.1 million.

The Federal Reserve released a statement that it would continue with its stimulus campaign. Within the stimulus campaign, the Federal Reserve is purchasing assets and providing low interest rates. They believe to be “growing underlying strength in the broader economy.” Their reasoning behind the decision is explained through their “taking into account the extent of federal fiscal retrenchment over the past year, the committee sees the improvement in economic activity and labor market conditions since it began its asset purchase program as consistent with growing underlying strength in the broader economy,” the Federal Open Market Committee said.

Thanks to the retail industry, there were more than 350,000 jobs introduced within the last year. According to BLS, dining (restaurants and bars) also added 12,000 jobs, and electronic and appliances industry added another 4,000 jobs. The healthcare industry provided an additional 33,000 jobs.

Overall, the amount of jobs being created has grown to 148,000. If the pattern continues, the Federal Reserve will have made the right decision. Even though it is a rather slow progression, it is a progression nonetheless.

Sources: http://www.bls.gov/news.release/pdf/empsit.pdf, http://www.bls.gov, http://www.federalreserve.gov/newsevents/press/monetary/20131030a.htm

Released on October 16 just two weeks before the United States Federal Reserve Bank’s next policy meeting, the most recent edition of the Beige Book has painted an anecdotal picture of the nation’s economy, on both a nationwide scale and by individual district.

Reporting on information gathered up to and including October 7, this latest Beige Book provides data and reports leading up to and during the recent government shutdown.  Both the Boston and Richmond districts cited the shutdown as having negative effects on tourism, especially because the Richmond district encompasses Washington, D.C.  The shutdown led to the closing of national parks and federally run museums, two things that make major contributions to the tourism industries of the Boston and Richmond districts.

The Wall Street Journal’s Market Watch reports that BMO Capital Markets’ senior economist Jennifer Lee said, “Hopefully the damage and hurt [from the shutdown] has been generally contained.”

Such seems to be the case across other districts.  The Beige Book reported that Atlanta, Boston and New York actually experienced a “particularly upbeat” trend in tourism.  Also, Dallas’ report noted a slowing of airline ticket demands but was able to attribute that to being typical of the season, yet stronger than the demands experienced in the same period last year.

Despite fearing the negative repercussions for Richmond’s tourism industry, hotels reported a lack of reservation cancellations.  This simply slowed expansion of the district’s tourism and travel industry, rather than halting or even shrinking it.

Of all the twelve Federal Reserve Bank districts, the Beige Book reported that Kansas City experienced the most of a slow down.  However, this lower travel trend can undoubtedly be attributed to Colorado’s recent flooding.

Colorado saw the cancellations of a multitude of flights, halting travel to and from the area.  According to the Colorado Department of Transportation, there are still roadways and highways that continue to be shutdown as a result of the flooding, contributing to the difficulties experienced by those attempting to travel throughout the state.  Landmarks experienced closures during both the floods and the shutdowns, slamming the District with back-to-back hardships for the tourism and travel industries.

It is, however, important to note that autumn isn’t typically one of the busier travel seasons for Colorado.  The Denver Post spoke with the Colorado Tourism Office director Al White, who said, “Typically only 8 percent of our tourism dollars are collected during the fall.  And it’s primarily a function of foliage viewers, and maybe it’s in conjunction with people going into the park and listening to the elk bugle, but that area is just a small portion of what Colorado has to offer.”  Therefore, as autumn turns into winter and ski season is upon us, Colorado should be able to make up this travel lag within the Kansas City district.

All in all, the twelve districts of the Federal Reserve Bank had generally positive reports when it came to the tourism and travel industries.  Despite the difficult challenges of Mother Nature’s wrath and the government shutdown, the economy seems to still be chugging along for this edition of the Beige Book.

Sources:

http://www.federalreserve.gov/monetarypolicy/beigebook/beigebook201310.htm?summary

http://www.businessweek.com/news/2013-10-16/u-dot-s-dot-federal-reserve-oct-dot-beige-book-summary-text

http://www.usatoday.com/story/money/business/2013/10/16/beige-book-september/2994307/

http://www.ibtimes.com/us-government-shutdown-2013-fed-beige-book-offers-clues-us-economy-1428880

http://www.marketwatch.com/story/fed-beige-book-detects-some-slower-growth-2013-10-16

http://www.coloradodot.info/travel/colorado-flood-highway-updates

http://www.denverpost.com/travel/ci_24109065/colorado-visitors-can-find-plenty-fall-foliage-untouched

Looming fiscal uncertainty leads to marginal increases in revised GDP

Recent government shutdown, budget battles and debt ceiling negotiations take its toll on economic growth.

By Choong Ming Ye

New York, NY – In a revised second quarter report from April through June, the nation’s gross domestic product rose 2.5% from the first quarter’s 1.1%; earlier versions of the second quarter report put the percentage at 1.7%.

In the latest report issued by the Bureau of Labor Statistics, nominal increases in consumer expenditure, exports and an increase of state and local government spending  gave the GDP a fractional boost. According to Paul Ashworth of Capital Economics with initial jobless claims falling to 331,000, “it points to a further gradual improvement in the labor market.” This has been the lowest level recorded in more than five years.

With government expenditure decreases, real estate and local government expenditures have increased a total of 0.4%, according to the Bureau of Economic Analysis, further buoying the GDP.

In spite of the all the fiscal uncertainty of late, consumer expenditure has continued to increase this quarter. Consumer spending has been historically one of the most important factors of GDP growth.  The BEA’s most recent report in September showed that real disposable personal income increased a total of 0.3% in August, which was a dismal zero percent in June, followed by real consumer spending at 0.2%.

While the increases are minimal, it means that consumers are still spending amid all the fiscal turmoil. With a little more disposable income, consumers will add some points to the fourth quarter GDP. Consumer confidence is measured by the Consumer Confidence Index which can directly survey real households; currently it is at 73.2 — down from a peak of 85.1 in August.

Nonetheless, “it’s very difficult to feel confident in December given we’re going to repeat part of what just took place in Washington,” said Charles Evans of the Federal Reserve Bank of Chicago in an interview with CNBC.

The upward boost was also aided by an increase in private investments of 0.41%, on top of the first quarter’s 0.91%. Millan Mulraine of TD Securities explained that the “fiscally induced soft-patch in the first half of 2013 may have been more shallow than previously thought.”

Whether it was shallow or not, the recent government shutdown will nonetheless take its toll on any upward percentage treks. The 2.5% increase reported in the latest GDP report was initially projected at 2.6% to 3% according to an estimated from Standard & Poor’s. A further analysis by S&P’s financial services shows that the government shutdown cost the economy an estimated $24 billion or a cut of nearly 0.6% off the projected inflation-adjusted GDP in the fourth quarter.

With the looming cloud of uncertainty, the Fed has recently announced it will maintain its monthly pace of bond purchases in order to help the economy. These bonds will include longer-term government debt and mortgage-backed securities adding up to $85 billion a month.

October 31^st, 2013

Consumer Confidence Index Staggers after six-year High

The CCI staggers in the 4^th quarter, largely due to the government shut down after reaching a six-year high in the 3^rd quarter

Written by: Nina Thomas

NEW YORK- Confidence in the economy fell after a six-year high following the Government Shut down. This is hurting an already weak Consumer Confidence Index that was slowly rebuilding after six years.

Prior to the shutdown, the US economy was slowing healing.  This was because of factors such as low interest rates in the month prior.  Mortgage rates have already increased and are negatively impacting the CCI.  Earlier this year a drop also occurred because of the payroll tax hike.

This decrease in the CCI is in conjunction with the debt-ceiling crisis. Because of the nature of the resolution from the Government Shutdown, these low numbers are expected to remain in the coming months.

CCI is a unique indicator because it is generated by the survey results of more than 5,000 households.  This measures the confidence of the average American.  A low CCI can hurt the market because investors are less likely to purchase equities.  It also impacts consumer purchases, which can strongly impact revenues.  Consumer spending accounts for 70% of all economic growth.

Darden reports a decrease in revenue this past quarter, “Fourth quarter diluted net earnings per share from continuing operations were $1.01, a 12% increase from $1.15 per diluted share in the fourth quarter last year.”  This is because of customers in need of affordability who now no longer choose to dine out.

While the average for Consumer Confidence should be 90, it is reported to currently be 71.2 falling from 80.2.  Economists were expecting around 75.0.  Last year’s number was continuing a six-year high, the highest it has been since July 2007.  This drop is unusual because the index normally only moves a point or two per month.  It is still higher than the average CCI from 2007-2009 which was 54.0.

According to the Conference Board, “Consumers’ expectations, which had softened in September, decreased sharply in October. Those expecting business conditions to improve over the next six months fell to 16.0 per cent from 20.6 per cent, while those expecting business conditions to worsen increased to 17.5 per cent from 10.3 per cent…”

The CCI and stock prices show a high correlation.  According to CNN Money, stocks have fell 1%.

“The collapse of confidence in government has substantially eroded already weak consumer confidence. Today’s consumer confidence rating is the fourth lowest since 1952.” Writes McInturff in “The Washington Economy.

Hiring as slowed down and more people have applied for unemployment benefits.  According to Business Insider, “Consumers’ outlook for the labor market was also more pessimistic. Those anticipating more jobs in the months ahead decreased to 15.3 percent from 16.1 percent, while those anticipating fewer jobs increased to 22.7 percent from 19.1 percent.”

This fall in the CCI may negatively impact the holiday season quickly approaching as well as the economy overall in the months to come. The timing of the shutdown has also impacted this.  Companies are combatting this by offering sales earlier on in the holiday season.

Unemployment Slight Decrease Can’t Compensate for People Leaving Labor Force (HDLN)

By Sophia Williams     October 30, 2013, 11:10PM

New York, NY — The national unemployment rate for August proved weak as the amount of people that fell out of the labor force was greater than jobs added. (DECK)

On September 6, 2013, the  U.S. Bureau of Labor Statistics (BLS) released the August unemployment report.  The unemployment rate dropped to 7.3% with the addition of 169,000 jobs mostly in retail and health industries. (LEDE)

The addition of jobs (figure) was very close to economists expectations, as they predicted new jobs growth to be between 175,000 – 180,000. (EXPECTATIONS)

In addition,  the BLS unemployment report showed revised numbers for nonfarm employment for the month of June and July.  June decreased from 188,000 to 172,000 and July decreased from 162,000 to 104,000.  The revisions led to a reported total of 74,000 less jobs added for both months.  With this current trend, the jobs growth is hardly keeping up with the rising unemployment. (REVISIONS)

The reports shows that the unemployment rate went down for reasons unexpected.  With more discouraged workers unable to obtain a job position, they left the labor force which led to a decline in the unemployment rate from 7.4% to 7.3%.  This has been the lowest jobless rate since December 2008.  According to the BLS database, labor participation made a slight drop from 63.4% in July to 63.2% in August.  Though the labor participation rate has been on a steady decline for years, this is the lowest it has been since 1978.   (Analysis)

“If people remained in the labor force and were currently unemployed and looking for work, then unemployment rate would be 9%,” said Edward Malca, economics Professor at Baruch College. (Quote)

The Federal Reserve is keeping a watchful eye on the unemployment report as it decides whether to slow down its monthly buying of $85 billion in Treasury and mortgages, also known as the stimulus program.  The Fed’s objective in buying Treasury bonds and mortgage securities is to help keep interest rates low and stimulate economic growth by having consumers spend more.  Ben Bernanke, the Federal Reserve Chairman, projected that the Fed will soon decide, at their next policy meeting slated for Sept. 17-18, 2013,  whether to begin slowing down the buying of bonds and mortgage securities.  The decision to slow down their purchases will be based on the overall health (growth/decline) of the economy, mainly the job market.  It does seems likely that, at the policy meeting, the Fed will cut down on their purchases  as many officials of the Fed would like to see the cut take place.  (Fed’s response)

“The Fed through its monetary policy (low interest rates and borrowing costs) is doing what they can to make it easy for people to borrow and spend, so that will create jobs,” said Clinton Winston, senior fellow of economic studies at Brookings Institution.   (Quote)

Majority of hiring took place in retail and the health care industries.  According to BLS, the retail sector “added 44,000 jobs in August and has added 393,000 jobs over the past 12 months.”  Furthermore, clothing stores added 14,000 jobs,  merchandise stores added 9,000, bars and restaurants added 12,000, and electronic and appliances added 4,000.  (Numbers)

Health care jobs increased to 33,000, as 27,000 of those jobs came in the ambulatory care sector.  Also, the filling up of positions in the business and professional  sectors totaled to 23,000 and in the last 12 months 614,000 jobs have been added to business and professional services.  Finally, manufacturing jobs have really been on the rise, as that sector has added 14,000 new jobs, and on a brighter note, the auto industry employment grew to 19,000 jobs, after a decline of 10,000 in July.  The growth in auto manufacturing positions was due to rehiring of workers who were previously laid off in July when car factories made changes to new models. (Numbers)

Manufacturers added 14,000, the first gain after five months of declines. Construction jobs remain unchanged in August. Auto manufacturers boosted hiring in August. Some of the jobs included workers who were rehired last month after being temporarily laid off in July, when factories switched to new models.  Overall, in the last 12 months, the auto industry added 34,000 positions. (Numbers)

As compared to August’s 2013 unemployment rate, August 2012 unemployment data appeared more gloomy as unemployment rate inched up to a whopping 8.1% and only a meager 91,000 jobs were added to the economy.   The labor force participation for August 2012 also was slightly poor in comparison to the current report, as August 2012 showed 65.3% of people participated in the work force, whether employed or unemployed. (Context-Comparisons)

Employers have added an average of just 148,000 jobs in the past three months, well below the 12-month average of 184,000.  Prof. Malca also noted that, “The economy is growing at a relatively slow rate of 1 1/2% – 2% during current recovery.”  Overall, within the last three months, 148,000 jobs were added to the economy. However, that number is a poor indicator of where the economy is now heading, compared to the previous better growth of a 12 month average of 184,000 jobs added.  (Overall Assessment)

National Unemployment Rates, 2008-2013 (Since 2008 Financial Crisis) 

 Source: Bureau of Labor Statistics

October 30, 2013

JRN3200 – Prof. Michael.Bobelian

Izak Held

GDP Increases. The Economy Is Happy.

GDP Rises 2.5 percent in the second quarter which was more than expected. The unexpected number is believed to be because of increases in exporting materials. Growing our market in the non-domestic ones is something we are happy to see.

We need GDP to continue it’s growth in order for us to be confident in the U.S. economy. If our Gross Domestic Product increases it means we are bringing more clients into the economy, expanding the market and surely there is more of a demand for employees. “The key to this comeback is the job growth”, said Dr. Roberta Schroder, Professor of Economics at  S.U.N.Y. Nassau Community College. With more GDP growth the jobs will be there and help our economy keep growing.

It is excellent to see the number higher than estimated, but isn’t it time that we start getting the actual numbers right? The importance of the number and estimates are crucial and it plays a key part in many businesses and sectors. We hope to see the markets take off now that the reports show complementary results.

Real gross domestic purchases increased as well given that this is a time slower than the ending months of the year from holiday purchases.

The estimate was at 1.7 percent and the actual figures came out to be .8 greater than that for 2013. In comparison to the year before, 2012, showed 1.3 growth in the second quarter. It is a good place to be in from that comparison to the year before.

The Dividends report showed an increase of $273.5 billion in the second quarter, in contrast to a decrease in the prior one. Showing us that companies are getting those dollars they need to pay out to shareholders.

Other increases include non residential fixed investments and Nonresidential structures that both increased from a decrease in the previous quarter. And Equipment, and Real residential fixed investment increased again in this quarter from the previous one. The only thing that we may want to be concerned especially about is Intellectual property products had a decreased of 1.5 percent, while it increased in the previous quarter.

Bureau Of Economic Analysis , “Gross Domestic Product” 2013 2cnd Quarter

Web. 30 Oct 2013 / <http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm>.

JRN3200

Prof. Michael.Bobelian

Naotaka Washimi

Labor Market Mismatch  is one factor for hovering at high unemployment rate.

     Despite the official end of the most recent recession announced by Committee of the National Bureau of Economic Research, national unemployment still hovers at a high rate in 2013 compare to pre-recession periods. Ben Bernanke clearly stated on September 18, that FOMC   Keep the monetary spigot open until the jobless rate down to 6.5%. However the question is that if his stance of moving towards more measures of quantitative easing would be an ultimate solution for achieving lower jobless rate as pre-recession periods and help him clean his tarnished nickname “Helicopter Ben”.

     Various indicators such as rise in home price, consumer confidence and stock price, gives American a sense of relief and hope for new economy. While consumers believe the economy is improving, Americans tend to disregard the problem of mismatch in labor market which potentially trouble U.S for long periods of time. America is now experiencing so-called the jobless recovery because for the observed volatility in the jobs numbers is that the labor market is responding primarily to short-term stimulus. Economist Aparna Mathur of American Enterprise Institute said that “Hiring is ultimately a matching game and if we could match each worker to a job vacancy, we could fill more than 3.7 million jobs.” In order to recover the real economy and promote Obama’s commitments of boasting the export and lowering unemployment rate, eliminate mismatching in the labor market is inevitable step.

     There are roughly three different type of mismatch in labor market. First one is that workers don’t have the skills that employers are seeking. Second is that pay and compensation isn’t attractive enough to attract job seekers. Last mismatch is the geographical mismatch in which job opening is taking place in state that people can hardly move in. Many job openings can be found in fields like engineering in general, information technology, and energy sectors that require specialized skills that can’t be learned quickly on the job.
The interesting finding is that The Bureau of Labor Statistics shows that job opening rate has been increasing since 2.1 percent of September 2011 to 2.6 percent in August 2013 while hiring rate stayed unchanged during those periods.

     There are a number of reasons why the mismatch in labor market occurs. First, labor immobility could be a factor. Economist Aparna Mathur said that workers who are underwater in their mortgages may not be able to sell their homes and move to places where jobs are available or homeowners expect house prices to recover, so they delay the sale of their house. Underwater mortgages became commonplace in the aftermath of the 2000s housing bubble burst, and, combined with economic slowdown started in 2008. According to Zillow Chief Economist Stan Humphries, Nationally, 28.6 percent of homeowners are underwater on their mortgage.

    Secondly, if people have been unemployed for a long period, then firms are more reluctant to hire them as they have a negative perception about their skills and human capital and employers are imposing relatively high hiring standards to save time for costly job training. The Bureau of Labor Statistics shows that in September 2013, more than 37percent of the unemployed have been out of work for 27 weeks or longer.

   Thirdly geographic mismatch is also account for hovering unemployment at high rate. The most recent data by The Bureau of Labor Statistics shows that compare to national unemployment rate, state with low unemployment rate are 3.0 percent in North Dakota, 3.7 percent in Nebraska, 3.8 percent in South Dakota ,4.6 percent in Wyoming, 4.7 percent in UTAH. 5.3 percent in Oklahoma. Those relatively low unemployment rates were brought by Shale Gas Revolution in energy sector and as energy development in Hydraulic fracturing gas  and oil continue to rise, there will be more demand for specialized labors in engineering.

     The hiring process within a labor market is governed by a matching function and it shouldn’t be underestimate. The misallocation leaves vacant positions open longer and forces job seekers to search longer to find work which is going to be an obstacle for achieving the real recovery and would be deterrent to the economic advancement in coming years. The rapid globalization caused dramatic shift in American economy and more and more people are require some sort of specialized skills in labor market. Consequence of Shale Gas Revolution, America’s manufacturing sector such as steel, chemical, heavy industry and construction will gain more competitiveness globally and would create more jobs. As of now, it is unknown whether this dramatic turnaround in the America’s industry would be a saver for lowering the unemployment. However it is time to realize that Helicopter Ben’s monetary policy is only to buy time rather that promoting structuring change in labor market. More importantly, every one of us should have motivation and eagerness to train ourselves to be competitive in labor market for coming years.

U.S. Consumer Confidence Index plummets, coming in below expectations

Following government shutdown, CCI drops, preparing retailers for a sluggish holiday shopping season

By Sara Lustberg

The tumultuous events surrounding the government shutdown and hitting the debt ceiling, has had a significant effect on consumer confidence in October.

According to the independent economic research organization, The Conference Board, the index of consumer confidence dropped 9 points to hit 71.2 from 80.2. This is the index’s worst performance since September of 2012.

Similar results are provoked when the economy is projected to experience a long-term expansion, and conversely such a drastic decline coincides with employment rate fluctuations. Economists speculate that buying intentions may decline even while the jobless rate declines, because of the sudden change in the need to satisfy of such a repressed demand.

The U.S. Consumer Confidence Index (CCI) is an economic indicator projected predominately by The Conference Board and the University of Michigan which surveys 5,000 households nationwide in an effort to measure the level of confidence consumers have in the performance of the economy.

Because The Conference Board also tracks consumer buying plans for items such as automobiles, homes, vacations, and major appliances, if inflation starts to rise, spending plans may increase for the short-term as consumers usually buy now to avoid having to pay higher prices later on.

“Similar declines in confidence were experienced during the payroll tax hike earlier this year, the fiscal cliff discussions in late 2012, and the government shutdown in 1995/1996. However, given the temporary nature of the current resolution, confidence is likely to remain volatile for the next several months,” verified Conference Board Director Lynn Franco in an interview with Business Insider.

Participants expecting business conditions to improve over the next six months dropped to 16 percent from 20.6 percent, but those expecting conditions to worsen jumped to from 10.3 percent from 17.5 percent, according to the report.

The unsettling effects of the government shutdown has extended far beyond workers on Capitol Hill, American citizens are now expected to be more frugal than ever before. Experts predicted a small decline but such a drastic has taken the overall population by surprise.  The median forecast in a Bloomberg survey of economists called for a decrease in October to 75.

According to Bloomberg Business News, Michael Brown, an economist at Wells Fargo & Co. in Charlotte, North Carolina, who projected a reading of 71.5 stated, “What we’re seeing is more hesitancy among consumers given the fiscal policy uncertainty and the absence of confidence about future employment prospects,” he continued, “It’s very clear that consumers are going into this holiday season more restrained than last year in terms of the pace of spending.”

Several chain department stores have announced plans to introduce discounts early in the holiday season to entice shoppers. Big names like Macy’s Inc., Nordstrom Inc. and Wal-Mart Stores Inc. seem to have let go of the concern that demand will falter in a Thanksgiving-to-Christmas holiday season.

Congress’s lengthy negotiations to reopen the government and delay the infraction of the debt ceiling will not alleviate buyers’ concerns in the short term. Lawmakers allocated enough money to fund the government until January and extended the debt ceiling only until early February 2014. This will keep uncertainty at an all-time high and disperse confidence until a stable deal is constructed and announced.

Conversely consumer confidence is not predicted to change much from now until March, which means that many wary retailers are not expected to see growth in sales throughout this upcoming holiday shopping season.

My name is Kemoine Kearse. I was born and raised in Brooklyn New York. I am currently an upper-level sophomore here at Baruch College and I should be a Junior by the end of this year. I am an Economics major along side  a minor in Journalism. I have more passion for Journalism because it allows me to express myself and be creative as well. I also have an intense passion for Aquarium Fish. I’ve been breeding aquarium fish ever since I was 10 years old.

I am pursuing a minor in Journalism because the major allows me to explore any and everything about this world that sparks my interest.Within the major I am kept up to date on the latest issues weather financially,natural disasters or celebrity gossip. I am specifically taken this course to have a business background as a student of Weissman.

After college I plan to use my skills in Journalism to enter the entertainment business such as the News or Hollywood. I would also like to get an internship as a Professional blogger.