As of Thursday night, no agreement about the looming debt ceiling or the shutdown of the federal government had been reached—but that didn’t stop reports of a possible short-term agreement on the most pressing of those two fiscal situations, namely the debt ceiling. Supposedly the House of Representatives is going to vote on a no-strings-attached raising of the debt ceiling before long, but one that will last only about Thanksgiving.
The drumbeat to do something about the debt ceiling, even something temporary, has been beating louder in recent days, despite the well-publicized natterings of a handful of Congressmen that default might not be the recession- or depression-producing, market-destabilizing, confidence-destroying event that virtually all economists say it would be. If the Senate and President Obama will go along with a temporary fix, little else will change over the next six weeks, and the two sides will join battle again before long.
A debt-ceiling deal wouldn’t address the shutdown, now over 10 days old. Besides the better-known impacts of the situation, such as shuttered national parks, the list of economic data that hasn’t been generated by the federal government gets longer with each day. So far, the delayed reports include last month’s employment numbers, international trade, import/export data, wholesale trade and construction spending. On Friday, the Producer Price Index, retail sales and business inventory data will join the list.
The longer the shutdown lasts, the less fresh data about the economy there will be. In the normal course of things, for instance, the Bureau of Labor Statistics would start its employment surveys for October during the week of Oct. 13. If the shutdown continues much longer that that week, it might delay or prevent the October report all together.