Shutdown Fears Have Americans Pausing Pricey Purchases

Paychecks have stopped for millions of federal workers and contractors — and some Americans are adjusting their spending as a result. About one in six Americans say they’re putting off a major purchase like a home or a car because of the ongoing government shutdown, according to a new survey from Redfin. Another 7% have scrapped those plans altogether.

While most households aren’t directly missing paychecks, the uncertainty rippling through the economy is giving some buyers pause — especially those whose income depends on federal funding. Still, the majority of Americans, about 65%, say the shutdown hasn’t affected their buying plans, suggesting most consumers feel insulated from the fallout for now.

The government shut down at midnight on Oct. 1 after lawmakers failed to agree on a budget. About 750,000 federal employees have been furloughed, while essential workers — including those supporting critical functions in the armed services, U.S. Postal Service, Social Security Administration and Transportation Security Administration — are required to keep working without pay.

Under the Government Employee Fair Treatment Act of 2019, signed by President Donald Trump during the last shutdown in 2018, federal employees are entitled to back pay once the shutdown ends. But a new White House memo, first reported by Axios, suggests that furloughed employees may not be compensated this time, leaving more uncertainty hanging over workers' finances.

“A government shutdown doesn’t just stop paychecks for some federal employees — it shakes the financial confidence of Americans,” Daryl Fairweather, Redfin’s chief economist, says in the report.

Plus, the shutdown is the latest in a series of economic stressors weighing on Americans’ confidence. In an August survey, Redfin found that more than two in five workers said they’d delayed or canceled a major purchase due to job security concerns, and over a third said they were more worried about keeping their job than they were at the beginning of the year. Earlier this spring, nearly a quarter of Americans said they’d put off big-ticket purchases amid uncertainty around new tariffs.

"People across the country are taking in the news and thinking, ‘we’ve faced inflation, tariffs, job losses, a volatile stock market, and now a government shutdown — what’s next?’" Fairweather says. "It’s understandable that some people are reconsidering buying a home or a car when the economy feels uncertain.”

For now, most everyday spending appears steady. However, the shutdown is only in its second week and many of the millions of affected federal workers and contractors haven't even missed a full paycheck yet. If the shutdown extends into mid-October, as current projections suggest, consumer confidence could take a more major hit. Senate Republicans and Democrats are still arguing over the health insurance subsidies that led to the shutdown, with each side voting down the other's stopgap funding bill again on Wednesday.

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