Could the shutdown impact holiday shopping?

Harvard economist Jeffrey Frankel weighs in on the shutdown and how it will impact holiday shopping.

Is the Shutdown Going to Hurt Holiday Shopping?

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Some experts warn that the partial government shutdown could have an impact on holiday sales.

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The National Retail Federation predicted on Wednesday that a shutdown lasting for two or more weeks could put a damper on holiday spending. The group is forecasting that sales between November and December will rise 3.9% this year.

Even two weeks will have some effect on the economy, says Harvard professor Jeffrey Frankel.

Frankel tells FBN’s Stuart Varney the sequester has already cost the economy one percentage point of economic growth.

“We could always lose more,” says Frankel.

Aside from inconveniencing consumers and leaving non-essential government employees without an income, Frankel says it’s an interesting question as to whether a prolonged shutdown could hurt holiday sales and the economy. In any case, he suggests the debt ceiling is already becoming a much bigger deal, given that the deadline of October 17 is fast approaching.

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“That is the ultimate cliff,” says Frankel.

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