From the “correlation = causation” department:
Orders for a wide range of U.S.-made capital goods plummeted in September and consumer sentiment weakened sharply in October, signs that a budget battle in Washington has held back the economy.
New orders of non-military capital goods other than aircraft, an indicator of business spending plans, fell 1.1 percent last month, the Commerce Department said on Friday.
That could be a sign businesses were shutting their wallets as the fiscal debate was heating up in Washington.
A surge in volatile aircraft orders helped push overall orders of long-lasting factory goods to rise a more-than-expected 3.7 percent during the month.
But orders for durable goods, which include everything from toasters to tanks, fell 0.1 percent when factoring out transportation equipment.
The data suggests businesses may have scaled back investment plans as a political impasse in Washington threatened to lead the government to miss payments on its obligations, although firms also could be trimming these plans over more general doubts regarding the economy’s strength.
If you are stupid, please feel free to believe this.
Why are more and more people so desperate to see the government reduce spending, programs, and/or their debt that they elected people into office who would fight against Obama so hard?
Answer: Because they see that Obamacare is going to impoverish them and ever-compiling government debt is going to drown the economy. They heard “experts” tell them that the only hope for economic stability for the entire planet was to empower the government to add more debt in order to pay interest on its previous debt.
This isn’t rocket science. The reason that the politics have become so crazy is precisely because people have utterly lost confidence in an economy with this government’s fangs sunk into its neck.
So the economic destruction causes political battles and the political battles might feed back into the economy. There is no evidence here. Correlation doesn’t mean causation. The economy’s weakness is perceptible quite apart from any political crisis. For all we know this would have happened without the pretend government shutdown.
Notice the concessions included in the article along with the guesswork assertions about how the shutdown hurt the economy:
While the economy was already struggling before the government shutdown, economists estimate the shutdown will shave as much as 0.6 percentage point off annualized fourth-quarter gross domestic product through reduced government output and damage to both consumer and business confidence.
And even before the impasse, the pace of hiring by U.S. employers had slowed sharply in September.
But even if it is true that the shutdown caused a response, that doesn’t mean that politics is the driver in what happened. The weak economy drove the shutdown in the first place. Economic turmoil can only cause more political fights as vested powers resist ending their free money ride.
Reuters is really saying the political battle has woken up consumers and businessmen from their blind stupor. The “experts” think a blind stupor is good for the economy.