A little more than a week before the debt ceiling deadline that year, Scott Davis, chairman of UPS, the shipping and logistics company, warned that the uncertainty was causing “big issues.” He told investors, “Consumer confidence is down because of it, unemployment’s still weak, so a lot of uncertainties right now.”
Paul Huck, chief financial officer of Air Products, a materials conglomerate, shared similar sentiments about the debt limit with his investors.
“You’d have to be blind to not see it. It’s on every news channel and every newspaper,” he said at the time. “So that worries consumers, which then worries a business which has to invest. We aren’t creating jobs and stuff like that.”
During this period, hiring came to a near standstill. In August 2011, companies hired only 52,000 Americans. Until that point in 2011, monthly private-sector job creation had been averaging 184,000.
With only a few days left, Obama and congressional Republicans came to an agreement to increase the borrowing limit. Still, Standard & Poor’s, the credit rating firm, downgraded U.S. government debt, citing the political dysfunction, and budget analysts said that relatively higher interest rates caused by the impasse could cost Americans billions of dollars.