How Might Consumers Cut Back on Spending During a Potential Government Shutdown?

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After voting to raise the debt limit and avert a government shutdown earlier this year, Congress is once again on the brink of another deadline to fund the government by the end of September. House Republicans have vowed to renege on the previous debt deal unless House Speaker Kevin McCarthy (R-CA) can extract further spending cuts. The Senate has pursued a bipartisan stopgap bill to buy time, but a shutdown seems much likelier than it did at the beginning of summer.

CivicScience data tracking consumer concern about a government shutdown reflects these tensions. Compared to data from back in January, when funding debates initially ramped up, U.S. adults ‘very concerned’ about the prospect of a government shutdown have risen by six percentage points (to 25%, and 63% are at least ‘somewhat concerned’).

If the government shuts down, around 4 million federal workers will be without pay (many of whom will be obligated to continue working), travelers could see extensive delays, and numerous benefits programs will dry up until Congress greenlights funding. These impacts extend well beyond just federal employees and the broader economy. According to the latest CivicScience data, 15% of all U.S. adults with an opinion expect to be ‘very impacted’ by a potential shutdown, with 54% reporting they’ll be at least ‘somewhat impacted’ (n=3,542).

Zooming in further on those consumers who expect to be at least ‘somewhat impacted’ by a shutdown, they have recently reduced their spending levels or anticipate cutting spending on a number of key areas. Clothing is the most common area for cutbacks among the categories polled (47%), followed closely by toys/hobbies/gifts (44%) and household items (42%). These might very well become heightened in the event of a government shutdown, and toys/hobbies/gifts in particular will be worth monitoring ahead of the holiday shopping season.

Curious to know further insights about how a potential government shutdown might impact your business? Book a meeting with CivicScience today to stay ahead of the news.