The first government shutdown in seven years has begun, and now lawmakers, business owners and economists are beginning to untangle the repercussions.
Creighton University economics professor Ernie Goss compiles a monthly index of the Midwestern economy that includes the Dakotas. He said the economy isn’t moving forward or backward in a meaningful way.
“What we’re seeing, basically, in the manufacturing economy – and it’s true in South Dakota as much as the rest of the region – things are just slow," Goss said. "It’s like a stone bouncing across a lake. Things are in and out, we’re not seeing any fast growth, but we aren’t seeing any real negative growth just yet.”
While confident the economy will recover from the shutdown in the long-term, Goss expects repercussions in the region the longer the shutdown lasts.
“We’ll also see some impacts in terms of trade, where the federal government is obviously deeply involved in trade," Goss said. "You could see some of those shipments into and out of the US slowed down because of the shutdown.”
Goss said permanent job losses should be minimal. Instead, moving into the last quarter of the year, he’s watching the bond market.
“Ten-year treasury yields, or interest rates on the ten-year treasury, is now at 4.15 (percent)," Goss said. "If that should move below four percent, that would give me concern about the short-term. That means the economy is slowing down more than we’re expecting. If it moves above five percent, that gives me concern about the long-term and inflationary pressures.”
Goss also predicts inflation continues to be a thorn in the side of businesses and consumers alike.