>> As the partial government shutdown rolls on with no relief in sight, concerns are mounting that it's effect on the economy could be dire. One major worry is that the shutdown could delay tax refunds. And hits companies that rely on shoppers spending a chunk of that cash at their stores.
Reuters, Nandita Bose.>> So tax refund dollars are really important at this time of year specially because we are coming off of a very strong holiday season. People have made their purchases for apparel and all matter of other stuff during the holiday season so this is what is considered a post-December lull and this is when your tax refund dollars kind of actually boost spending.
And you've held on buying say a washer, dryer for the year or a refrigerator for the year, this is the time of year when you get that good amount of money and you would go make that purchase.>> Companies that could suffer include Home Depot and Lows, who around refund time see more sales but that home improvement project isn't the only thing that will have to wait.
A new wardrobe will too one economist told Reuters he expects the shut down to hurt retailers like Macy's and Nordstrom, while chains like McDonald’s and Starbucks would get hit too. And its particularly bad for fast food chains since they wouldn't be able to make up for lost sales to government workers during a shutdown.
But economists and executives don't just fear the direct impact of 800,000 federal workers going without pay, their bigger worry is that that the shutdown could hurt consumer and business confidence. Just last week the Chicago Federal Reserve president said that, while the immediate effects of the impasse would be small on America's 20.7 trillion dollar economy.
The indirect psychological effect could be substantial, with consumers starting to hunker down.