Will the government closure the US economy? | Politics News

The United States government is scheduled to close Unless Congress The credits law passes to finance its operations.

Without this legislation, federal agencies will have to suspend the non -essential activities that start on Wednesday at 12:01 am in Washington, DC (04:01 GMT).

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Although Republicans control the House of Representatives, the Senate and the White House, they cannot pass the bill alone. While Republicans have 53 seats out of 100 seats in the Senate, 60 votes are needed to strengthen the bill to vote.

Republicans have suggested a short -term spending plan, but Democrats are trying to use the close closure of the leverage. They pay to reverse the medical aid cuts listed in the tax legislation that was approved in July and expanding the tax credits of health care purchased through government exchanges.

With any of both sides ready to settle, closing can have ripples in the American economy.

Laying workers and influencing the feeling of consumer

The federal government is the largest employer in the country. In the memorandum last week, federal agencies were asked to prepare workers ’layoffs for programs that are running out of money by the deadline and priority that is not considered priority by the administration. The same memo did not explicitly clarify what these priorities are.

The White House did not respond to the island’s request to clarify.

The discounts will be through the so -called power reduction, or RIF. Daniel Hornyng, a politician at the Economic Policy Research Institute at the Stanford Institute.

“There is no legal authority obtained by (the White House) from closing to carry out opportunities for conflicts,” Horing told Al -Jazeera project.

RIFS requires a period of 30 to 60 days if an agency considers discounts, so Horong expected that any discounts will now be challenged in court.

But even if the cuts are banned in the job, it is not clear when it will happen. As a result, those who work outside the work may stop purchases, especially for the large elements of tickets, according to Michael Klein, a professor of international economic affairs at the University of Tats in Massachusetts.

“Consumers will start spending less because they are concerned about what the future looks like,” Klein told the island of the island.

“It may be decided (by the court) that it is not legal, but it might be a long time. Even if everything is resolved, it may not spend those who leave the job as if they were otherwise.”

The memo did not provide a specific number of jobs that can be cut. It comes more than It is also expected that 150,000 federal workforce worker will leave After accepting the acquisitions this year. These cuts – as part of the postponed exit program, which kept workers on salary statements until the end of September – the largest discounts in the work of federal workers in about 80 years.

In addition to the permanent demobilization of workers, government workers face signals as long as the government is closed. Workers who are considered unnecessary for government operations will stop working until Congress passes budget bills or Stopgap.

Late job report

On Tuesday, job survey and employment circulation, or tremors issued by the Ministry of Labor showed that employment decreased by 114,000 jobs to 5.1 million in August, while job opportunities increased slightly by 19,000 to 7.2 million. If the government closes, the Ministry of Labor will delay the launch of the main economic reports that measure the health of the American economy.

On Thursday, the weekly unemployed work claims are scheduled to be published, and on Friday the monthly job report, in detail the number of jobs created, in any unemployment sectors and rates. Usually, the department issues these reports on the first Friday of each month unless a vacation interferes.

The broader labor market has already shown the signs of cooling in recent months. In August, the American economy, the largest in the world, added Only 22,000 jobs.

Sleeping working conditions was one of the reasons Federal reserve reduced interest rates by 25 September points. The delay in the new data may leave the central bank with less information to consider because it weighs whether the prices will be reduced again. However, the short delay is unlikely to have a major impact because the Federal Reserve Policy meeting for two days until 28-29 October.

Horong believes that this closure will come during a unique economic situation that the central bank will need to watch.

“The main risks are that we are in an unstable place in the economy in any case. Unlike the previous closure, such as the 2018 closure, the economy was working well, and the long -term closure, the economy, was in the midst of slow but long recovery.”

“Now the labor market has really placed. In recent months, it seems that the risk of inflation remains due to the definitions. Thus, this is a kind of this question about how much the economy can bear.”

Market impact

Historically, closing had a limited impact on the financial markets because investors usually realize that the closure is short -term.

“Usually in closing scenarios, there is no significant impact on stock markets or bond markets, mostly because investors tend to look through closure and evaluate that any temporary slowdown linked to its closure will be reflected when the government opens a reserve.”

This time, the dynamics differ because the government plans to reduce jobs against the status of employees only on the leave, and this is against the broader Trump’s economic agenda that focuses on the customs tariff, which has already pressured companies.

The markets were relatively flat before the closure on the horizon. As of 3:30 pm in New York (19:30 GMT), the Dow Jones industrial average increased by 0.08 percent, the Nasdaq Stock Exchange increased by 0.06 percent and the S&P 500 increased by 0.2 percent.