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The economic impact of a Government shutdown (you might be surprised):
Bottom Line: This entry is based on my research of the current partial government shutdown. By now you’ve likely heard that 800,000 Federal employees have been furloughed. National Parks have been closed etc., but in sheer dollar terms how much lost economic activity is actually being lost per day? Based on my initial estimate I had a figure of around $280 million per day. Research firm IHS calculates the negative impact at about $300 million per day. I’ll go with their number which is the higher of the two. But what about the other end of the spectrum… Savings.
As we all know we have to borrow money every day to pay for a lot of our federal expenses. So how much are we saving per day? This figure is a bit more complicated because it’s a fluid number based on tax receipts in any given day. Yesterday the Treasury Secretary indicated that we only have about $30 billion in debt spending capacity left. We’re pacing about $700 billion in new debt this year. That amounts to about $1.9 billion per day. The Federal Government can choose to continue to debt spend until the $30 billion has been exhausted. At that point Federal tax revenue would have to be used. If that occurred there could be additional furloughs that may slightly increase the daily impact from $300 million but we’d be saving about $1.9 billion per day. So yes the economy is and would continue to be negatively impacted but with cost savings of more than $1 billion per day net of the negative impact one could argue it’s a positive economic outcome.
How much impact the partial shutdown has on the housing market:
Bottom line: You may have heard that there could be issues with loan processing as a result of the partial Government shutdown. This is true for some as the staffing levels at the FHA,
By the numbers:
Most mortgages that are originated are able to verify income without the need to confirm with the
Instant analysis: What percentage of Americans say they were impacted by day 1 of the partial Government Shutdown?
Bottom Line: I’m not one to report on one poll. I’m always an advocate of averaging polling data together to try to arrive at results with as little margin for error as possible. In this case I only have one available poll to look at and the sample was over 60,000 respondents (vs. about 1000 for the average poll).
Yesterday Yahoo asked: Is the government shutdown impacting you and your wallet?
So a quick takeaway. 93% of respondents aren’t seeing any impact. So for most Americans this saga and drama would appear to be overplayed by the politicians thus far. Secondly, they see how little the Federal Government actually impacts their day to day lives. For this reason if no other, it’s understandable why both sides appear willing to allow this to drag out for an extended period of time. Yesterday the word out of
Your home is worth about $31,000 more today...:
Bottom Line: Thanks to the folks at Core Logic we have the August home price data. The survey says… The rate of year over year growth is starting to slow just a bit as expected but here’s the breakdown:
So the news continues to be nicely positive. The recovery continues nationwide.
Bottom Line: Maybe it’ll be a decent holiday hiring season after all. After the announcements from Target (20% less seasonal hiring), Wal-Mart (flat to 2% more hiring) and Kohl’s (5% less hiring) had many worried that we’re set up for a poor holiday hiring and shopping season. Maybe it’s just that Amazon.com is taking business away from the traditional retailers.
Amazon just announced that they’ll hire 40% more people for the holidays. That’s not all though… They’re hiring 70,000 FULL time positions. That would seem to indicate that they’ll retain these employees past the holidays. I’d speculate that they’ll shift into roles for distribution centers offering same day delivery service next year.
Fastest year over year wage growth:
Bottom Line: Are you making more money this year? The average pay increase 2013 over 2012 is 1.7%. So what industries are sporting the best wage growth and which ones aren’t? PayScale.com produced the following chart below:
All of folks in the office got a decent laugh out of media being on top…
Is your pension wasting your money? Odds are… yes:
Verizon accidently allows many to keep unlimited plan:
Bottom Line: Verizon accidently allowed an unspecified number of customers to keep or obtain an unlimited plan when signing up for a new subsidized phone on their website. Verizon ended its unlimited plan for any subsidized well over a year ago. If you happened to be one of these customers the good news is that Verizon will honor the unlimited plan and pricing for the duration of the two year contract.