October 2, 2013

Shutdown stirs growing concern in private sector

It may be business as usual for most so far, but an extended shutdown would hurt private companies, many say.

By Joyce M. Rosenberg And Scott Mayerowitz
The Associated Press

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The FHA itself foresees “a decline in home sales during an extended shutdown period, reversing the trend toward a strengthening market that we’ve been experiencing.”

Buyers wouldn’t disappear. But some would linger in limbo until the government reopened and a backlog of applications cleared. A lack of homebuyers could hurt stores like Home Depot and Lowe’s, along with retailers that sell furniture and televisions.

Apart from federal workers, many consumers may start to worry about the economy and pull back on spending, Davey said.

“A lot of people are now just feeling like they are getting back on their feet,” he said. “It seems like every time we get back to somewhat normal, we get some type of squabble in Washington that brings back to a head.”

Yet others express confidence that the shutdown will cause little pain beyond the Washington area, with its hub of government workers and federal contractors.

Earlier this year, when across-the-board government spending cuts kicked in, some worried that the cuts would derail the U.S. economy, noted Jim Lentz, Toyota Motor Corp.’s CEO in North America.

“Basically, they were told that when you wake up tomorrow, the Earth is going to stop spinning,” Lentz said. “For the most part, the Earth didn’t stop. And I think that’s how they view this again.”

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