Although the economic impact of the US government shutdown remains small, its impact on confidence and the fragile global recovery could be much more severe. A chart by Business Insider shows that confidence has collapsed in the past week, likely due to the US government shutdown. With services dominating advanced economies and representing upwards of 60% of economic activity, confidence is a vital ingredient for achieving growth. Therefore, even a short shutdown is affecting the confidence in the economy through workers' lost wages especially those with mortgage repayments. With this in mind, a protracted shutdown could be disastrous for the US's tentative economic recovery. (VIEW LINK)
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