The Government Shutdown: Rough Seas for Investors

Nickolas Roberson | United States

“NOTICE: Due to a lapse in federal funding this website is not being updated.” That’s the large, menacingly red statement that one reads as they access portions of the websites for the United States Census Bureau (USCB) or Bureau of Economic Analysis (BEA). Investors, entrepreneurs, and economists all rely on government data to make market decisions. Yet with the government shutdown, this data is unavailable.

The Government Shutdown: A Shot in the Dark

Thomas Jefferson once said, “Money, not morality, is the principle commerce of civilized nations”. But with little to no economic data trickling out of the government, economists and investors are beginning to become hesitant as to whether or not they should be investing in American businesses and industries. If they do so, many are unsure of what industries invest in.

Federal entities like the BEA and USCB provide crucial economic data. Thanks to them, individuals can perform their own analyses of American industries. People use data such as GDP, unemployment, personal income, inflation, and trade balance to make logical, informed decisions. These include buying and selling stocks, transferring money, and starting businesses.

Economists and investors alike acquire as much data as possible when conducting business in the market. After all, it’s their money on the line. Within the confines of the market, these individuals enjoy smooth sailing with their money, just like their maritime merchant ancestors did centuries ago. It allows for the safe transferring of funds and the ability to buy low and sell high. However, these actions only occur after careful research and processing of economic data.

Rough Seas

Now, what happens when investors and economists are unable to obtain such data? What happens when they must make uninformed decisions in markets? Their proposed “smooth sailing” quickly turns into choppy waters and rough seas. Their vessels of money careen in directions they hoped to avoid. They become uneasy and nervous about the markets their money is in.

Without the vital data from the USCB and BEA, which are closed due to the government shutdown, investors and economists may not be able to make safe, informed decisions with said capital. They are also more likely to be apprehensive about industries and the general economy. With this in mind, along with the theory that emotion influences the market and economy, investors may be in rough seas. Until the end of the shutdown, expect markets and investors alike to be turbulent. 

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