Chattanooga Times Free Press

Shutdown beginning to have ripple effects on businesses that depend on federal employees as their customers,

- BY CHRISTOPHE­R RUGABER

WASHINGTON — From power restaurant­s in Washington and a belt-buckle maker in Colorado to a brewery in California, businesses that count heavily on federal employees as customers are feeling the punishing effects of the government shutdown.

In many cases, it’s forcing them to cut workers’ hours and buy less from suppliers — measures that could ripple through the larger U.S. economy.

“It’s a fog with no end in sight,” Michael Northern, vice president of a company that owns three restaurant­s in the Huntsville, Alabama, area near a huge Army base that houses some 70 federal agencies, including NASA. He said business is down 35 percent. “People are just going home and nesting, trying to conserve resources.”

Western Heritage Co. in Loveland, Colorado, which makes buckles for uniformed employees of the National Forest Service and other outdoor agencies, has seen sales plummet 85 percent this month and laid off 12 of its 13 workers.

In the nation’s capital, Clyde’s Restaurant Group, which owns the Old Ebbitt Grill restaurant down the street from the White House and 10 other dining spots, reported a 20 percent drop in sales and is cutting hours for waiters and kitchen staff.

So far, the broader economic impact of the shutdown is not clear — because, well, many agencies that compile such data are closed.

The Labor Department, which is open, said Thursday that the number of people seeking unemployme­nt benefits fell last week to the lowest level since 1969, a sign the job market is still strong.

But most economists are forecastin­g slower growth in the first three months of this year. Analysts estimate gross domestic product shrinks 0.13 percentage points for each week the shutdown lasts.

Newspapers in English

Newspapers from United States