Federal shutdown U.S. stocks rose Friday, with the Standard & Poor’s 500 index trimming a weekly decline, as optimism grew that lawmakers would reach a deal to end the budget impasse and avoid a default on the federal debt.
Federal Reserve Bank of San Francisco President John Williams estimated a two-week government halt would shave 0.25 percentage point off fourth-quarter economic growth. A one-week closure would probably take 0.1 percentage point from economic growth, according to the median of 40 estimates in a Bloomberg survey of economists.
The U.S. government shutdown is beginning to hit the factory floor as concerns grow about the economic consequences of a prolonged stalemate in Congress.
The standoff, prompted by Republicans’ determination to halt President Barack Obama’s health care reforms, could affect U.S. companies that rely on federal employees and funding.
Some companies have warned of project delays, employee furloughs and other consequences of a prolonged budget impasse:
The Boeing Co.: Boeing could furlough some employees in its defense and space operations next week if the federal budget stalemate continues, a spokeswoman said Friday.
Furloughs are not currently expected in the commercial airplanes unit, said spokeswoman Meghan McCormick in Washington, D.C. That unit employs the vast majority of Boeing’s 84,000 Washington workers.
On the defense side, however, “We are looking at the possibility of furloughs that could start next week,” said McCormick.
She said specifics are not available yet.
Lockheed Martin: The weapons maker said about 3,000 employees would be furloughed on Monday due to the U.S. shutdown. The number of employees was expected to increase every week if the shutdown continued, the company said.
Walmart: The retailer’s Sam’s Club chain saw a slight slowdown last weekend at its warehouse club stores near government facilities but anticipates it could see a lift in food sales if military commissaries remain closed, the unit’s CEO Rosalind Brewer told Reuters.
The chain is letting military families shop without paying a membership fee at 50 outlets located near military bases, Brewer said.
CONTRACTS AWARDED, AMOUNTS UNKNOWN
Meanwhile, The Pentagon may have awarded millions or billions of dollars in contracts since the U.S. government partially closed Oct. 1. Who knows?
The exact amount will remain a mystery for now, because the military said this week it has stopped publicly announcing contract awards. And the Defense Department won’t resume until the shutdown ends.
“During the shutdown we will not be able to publicly announce contracts,” Lt. Cmdr. Nathan Christensen, a Pentagon spokesman, said in an email. When it ends, the Pentagon plans to catch up with “one big announcement.”
The military’s contract awards notices are among the government data that has disappeared from public view during the shutdown. The casualties include Census data, agricultural price reports and the Labor Department’s September payrolls report that was scheduled for release Friday.
TOURISM TAKES HIT
Some of the country’s most recognizable icons can be viewed from a distance — the full faces of Mount Rushmore, Devils Tower, the granite formations in Yosemite, the Grand Canyon and Mount Rainier. No one needs to tell tourists that it’s not the same as camping on the beaches of the Grand Canyon off the Colorado River, walking the slot canyons at Zion or watching water spew at Old Faithful in Yellowstone.
“There’s no question it’s disappointing,” says Bruce Brossman of the Grand Canyon Railway, which has furloughed conductors and engineers who run trains into the canyon. “You can get a sneak peak and maybe get inspired to come back.”
Returning to the national parks might be easier said than done, particularly for international tourists who often plan expensive and lengthy vacations.Reuters; Rami Grunbaum of The Seattle Times; Alex Barinka, Aubrey Pringle, Danielle Ivory and Kathleen Miller of Bloomberg News contributed to this report.