And retail experts worry that could have a significant impact on the critical Christmas season.
“It could have an impact on holiday sales, which I don’t think I need to tell you is the most important time of year for retailers and the economy as a whole,” said John Holub, president of the New Jersey Retail Merchants Association. “That’s what’s most troubling.”
“A healthy retail environment is critical to a healthy economy, and when you don’t instill that confidence into consumers, they’re not going to spend,” Holub said. “One of these days, they’ll figure out that you can’t create an environment of such uncertainty and not expect some kind of consequences.”
The University of Michigan/Thompson Reuters consumer sentiment index hit 73.2 this month, down from about 77.5 in September. And the consumer expectations index fell to 62.5, the lowest since late 2011.
And although the federal government is back up and running, consumer sentiment is not likely to increase because the deal that brought the government back to life is only a temporary fix, Holub said.
That will likely keep economic uncertainty at top of mind for shoppers this holiday season, he said.
“We aren’t having a very robust and vibrant recovery,” Holub said. “We are heading in the right direction, but we’re only projecting about a 3 percent increase in sales (nationally) this holiday season.”
Holub said he remains optimistic the government’s behavior in recent weeks won’t lower that projected 3 percent increase, but officials aren’t doing anything inspire widespread confidence.
“They’re doing everything possible to discourage and inject a zero level of confidence, and that’s unfortunate,” he said. “The sooner these policymakers wake up and realize what they’re doing, the better.”