Another US government shutdown could be on the horizon as the Republicans insist that the government cut off all funding for Planned Parenthood.
But, so far, no one really cares.
In a recent note to clients, Citi’s Jeremy Hale and his team shared a chart showing two reflections of this: the US Economic Policy Uncertainty News-Based Index in blue and the Bloomberg News Story Keyword Search “shutdown” in red. Both suggest that people are not interested in reading about the looming government shutdown — or what it would mean for the economy.
Both measures look pretty depressed, especially relative to the same period ahead of the government shutdown of 2013.
“A US government shutdown next week is far from assured but concerns are mounting,” writes Hale. “The media is currently focused on other things it seems, hence the limited airtime this topic has garnered so far.”
The US Economic Policy Uncertainty News-Based Index, as the name suggests, measures policy-related economic uncertainty. The index is built from newspaper coverage of policy-related economic uncertainty, and “aims to capture uncertainty about who will make economic policy decisions, what economic policy actions will be undertaken, and the economic effects of policy action (and inaction),” write the creators of the index, Scott R. Baker, Nicholas Bloom, and Steven J. Davis.
Generally speaking, this index has spiked during tight presidential elections, past government shutdowns, debt ceiling debates, and the 9/11 attacks. At the micro-level, policy uncertainty “increases stock-price volatility and reduces investment and employment” in government sectors, and at the macro-level, it foreshadows “declines in investment, output, and employment.” (You can read more here.)
But in this chart, the index is pretty low relative to the rest of the data over the last six years. And, furthermore, it is much lower than the last time a government shutdown loomed.
As for the second line, it measures how many times people search the term shutdown. Back in 2013 during the first government shutdown, there was an insane spike — and during the last 6 years nothing has come even close to that. But right now, it’s also really low.
Admittedly, if you look closely, you can see that there’s a slight increase in both lines over the last month or so — but relative to the last government shutdown, it’s basically nothing.
And, in any case, even if there was a government shutdown, it might not even have a huge effect on the economy.
“Are shutdowns bad for the economy? The short answer is: not as bad as you may think,” Societe Generale’s Aneta Markowska previously noted. “During these episodes, the impact on economic activity was either negligible or very short-lived.”