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Looming Federal Government Shutdown
There is an increasing likelihood that the federal government will shut down at the beginning of the fiscal year on October 1, 2023.
The U.S. Chamber created a memo for members with more detail about the possible length of a shutdown and the implications for the business community and the economy so that you and your members can prepare accordingly.
The Auto Strike: What you need to know...
Last week, the United Auto Workers (UAW) initiated a strike against the “Detroit Three” — Ford, General Motors, and Stellantis — after failing to reach a deal on a new labor contract.
What we're doing: The U.S. Chamber of Commerce—with the support of more than 150 organizations nationwide—sent a coalition letter encouraging President Biden to help prevent an auto industry strike.
On the record: U.S. Chamber President and CEO Suzanne P. Clark issued the following statement in response to the strike:
"The decision by the United Auto Workers (UAW) to initiate a strike will have far reaching negative consequences for our economy, for the American workers directly employed by the Detroit Three, their suppliers and dealers, as well as the thousands of small businesses and families whose livelihoods will also be put at risk."
Implications of the strike: An auto strike will impact millions of Americans and thousands of businesses. Some key implications include:
- The things we buy, including new cars, will be more expensive to offset the pay hikes being demanded.
- Non-union businesses – like auto part suppliers or restaurants that serve lunchtime meals to workers – will pay the price because of the strike.
Dig Deeper: The U.S. Chamber released an updated blog post with everything you need to know about the strike.
Biden Admin Cancels Alaska Oil and Gas Leases: Our Response
In response to the Biden Administration's recent announcement that it would cancel oil and gas leases in Alaska, Christopher Guith, Senior Vice President of the U.S. Chamber of Commerce's Global Energy Institute, released the following statement:
“As OPEC+ nations continue to cut oil and gas production, the last thing the United States needs is more areas off limits to produce domestic energy. Congress directed that ANWR be available for production in 2016, and the Biden Administration should comply with the law and be taking steps to improve energy security, not weaken it.”
Credit Cards Bolster Consumer Spending
Total credit card debt rose 0.8%, reaching an all-time high of $1.27 trillion in July. However, as a percentage of after-tax income, it is still well below the average of the last 20 years.
Why it matters: Consumers are using their credit cards to continue spending at the robust levels they have been for the last three years.
Be smart: At the same time, consumer borrowing for things like cars, RVs, education, boats, trailers, and vacations rose a modest 0.2% in July. The difference in these types of consumer credit is interesting.
- Credit card rates don't fluctuate as much as other rates because the principal is capped, and the debt is unsecured.
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Because of this, consumers are using credit cards to keep spending on everyday items but are spending at a slower rate on bigger ticket items.
Looking ahead: This situation is likely to continue. Wages, after factoring in inflation, are rising, albeit modestly. It will take some time to make up for lost purchasing power. Consumers should be able to keep spending, using their credit card balances to fill gaps.
But: They may continue to hold off on borrowing for larger purchases that would weigh on their budgets.
Want more insights into the economy? Click here to keep up with developments as they happen.
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