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Layoffs and Production Disruptions Loom at Firms Tied to U.S.

Wall Street Journal (10/03/13) James R. Hagerty; Doug Cameron; John W. Miller

Some defense contractors and manufacturing companies are experiencing layoffs and production disruptions due to the federal government’s shutdown. Nonessential government workers were furloughed on Tuesday, when Congress failed to authorize spending authority.

Without spending authority, the government has reduced its supply orders, hurting its suppliers and the companies linked to them. Many affected companies have not yet seen major effects, but predict that this could change if the shutdown continues for a week or more. Service-based companies, on shorter contracts, are expected to fare the worst.