The U.S. government shutdown continued this week, deepening concerns about the long-term economic impacts of the impasse in Washington.
In addition to the lost economic activity from the 800,000 federal employees and up to 4 million government contractors who are furloughed or working without pay, numerous government functions have ceased, with wide-ranging impacts across the U.S. economy.
Airport security lines are getting longer, government-backed mortgages are slowed down, and aid to farmers has been delayed.
The economic losses have economists concerned that economic growth could stagnate or even slip into a recession if a swift resolution isn’t found. Despite these fears, U.S. stock markets have been climbing steadily for weeks, a vote of confidence that a deal will be struck soon.
Meanwhile, across the pond, political stalemate is leading to even worse forecasts in Great Britain. The British Parliament resoundingly rejected Prime Minister Theresa May’s Brexit proposal, but then voted to keep her in power, a sign that they don’t like her plan but don’t have better alternatives.
The ongoing struggle increases the chance of a “hard Brexit,” which would result in a complete break with Europe, without trade deals or plans in place, which could create massive economic shockwaves. Alternatively, there are rising calls for another referendum, which could nullify the last two years of turmoil and return Britain to the European Union.
Sour outlook for orange juice
There was nothing sunny about the frozen concentrated orange juice futures market as it neared a three-year low this week under $1.19 per pound.
Prices are dropping as Florida prepares to harvest an orange crop that could swamp the OJ market. Demand for the beverage has been falling for years as consumers shift to other fruit juices or alternative drinks, and competition from Brazilian OJ has driven prices lower.
Meanwhile, Florida orange trees have been devastated in recent years by the citrus greening disease, and whole groves were destroyed by Hurricane Irma last year. Scientists are beginning to combat the disease and farmers have replanted trees, but are now facing low prices, giving them a cloudy outlook.