A new report from the Commerce Department shows that half of the nation’s counties have still not recovered from the economic depression despite the overall nationwide economy indicating a recovery.
The Wall Street Journal reports that despite the good nationwide number the economic recovery is uneven at best.
One of the report’s authors said that the report shows why many Americans feel like the economy is not improving. Emilia Istrate said that Americans feel the economy locally and that if there’s no recovery in their area they don’t believe overall conditions are improving.
The report examined GDP, total number of jobs, unemployment rates and home prices.
The U.S. unemployment rate fell to 6.7% but the number off set some darker information regarding job creation and employment levels.
The economy only generated 74,000 jobs in December with a significant number of Americans deciding to give up looking for work. Those who say they are giving up looking for work are removed from the rolls for unemployment and can cause a drop in the overall number.
The labor force participation rate fell to 62.8% which is close to a 35 year low.
The report showed the leisure, manufacturing and services sectors added jobs but construction fell 16,000, the biggest drop in 20 months.
A economic expert with the BBC says the weakness of the report throws into question other reports that said the American economy was growing.
A federal bankruptcy judge ruled Tuesday that Detroit’s historic bankruptcy will be able to continue and that the city is eligible to shed billions of dollars in debt.
“This once proud and prosperous city can’t pay its debts. It’s insolvent. It’s eligible for bankruptcy,” Federal Judge Steven Rhodes said during this ruling. “At the same time, it also has an opportunity for a fresh start.”
While the bankruptcy plan has not been submitted to the judge, today’s hearing cleared the way for the city to make the submission. The ruling today addressed issues regarding whether or not Detroit was eligible to stay in bankruptcy court.
The decision could have impact nationwide as Judge Rhodes ruled that municipal pensions are like any other contract and can be cut in a federal bankruptcy filing.
Opponents of the bankruptcy plan filed an appeal only minutes after the ruling.
The European Commission is warning the Spanish and Italian governments that their draft budgets for 2014 do not comply with new debt and deficit rules. The Commission also said that France and the Netherlands barely qualified for the new standards.
According to the European Union’s charter, countries that do not comply will likely have to revise their tax and spending plans before they can be submitted to national parliaments. The warning marks the first time the EC has taken this step.
Eurozone members states are required to cut deficits until they reach a balanced budget. They also have to reduce levels of public debt. The Commission usually gives countries flexibility if their deficit is below the EU ceiling of 3% of the nation’s gross domestic product.
The Commission said that France, while just below the 3% threshold, was making only “limited progress” in reforms.
The Eurozone economy grew by .1% from July to September in data released Thursday, down from .3% growth in the previous quarter.
A major California resort town is threatening to enter bankruptcy due to salary and pension costs.
Desert Hot Springs, California, a city of 26,000 east of Los Angeles, could be the third major city to file for bankruptcy after San Bernardino and Stockton.
The city’s problems came to light last week when a new finance director discovered a $3 million shortfall in the city’s $13.5 million budget during a routine record check. The interim director of finance could not explain the reason for the shortfall but said it was likely due to higher than expected pension and salary costs.
If the city ends up filing, it will be the second time since 2001 that the city has filed for bankruptcy proection.
Amy Aguer, the city’s interim director of finance, said that 70 percent of the budget was consumed by police costs between salaries and pension payments.
In a blow to France’s attempt to right its struggling economy, Standard and Poor’s has downgraded the country’s credit rating one level to AA. The move comes two years after France lost top-rated AAA status.
The downgrade was attributed to high unemployment in the country that analysts believe will make it difficult for the government to boost economic growth.
S&P said in a news release they expect government debt to reach 86% of gross domestic product in 2015 and that unemployment will stay over 10% until well into 2016.
The French government responded by saying that their debt rating was one of the safest in the Eurozone. The downgrade theoretically makes borrowing more expensive for the French government.
S&P did add a “stable” outlook to France meaning it’s unlikely there will be a downgrade to their credit rating within the next two years.
The U.S. debt deal sparked relief around the world Thursday, but happiness was tempered by head-shaking that the world’s largest economy had nearly defaulted on its financial obligations, and President Obama said that the United States’ global standing had been damaged.
World leaders and investors have been puzzled for weeks about the showdown paralyzing Washington, and some had complained that U.S. politicians who lay claim to global leadership were doing little to safeguard international finances. On Thursday, officials and newspapers from Beijing to Madrid said the crisis raised fresh questions about the strength of the American political system.
Obama, meanwhile, said that the shutdown had done great harm. “It’s encouraged our enemies,” he said. “It’s emboldened our competitors. And it’s depressed our friends who look to us for steady leadership.”
World markets were largely lower Thursday after having risen earlier this week on expectations that a deal would be made.
Source: The Washington Post – The Washington Post: Around the globe, U.S. debt deal prompts relief, but also exasperation, worry for future
The end of the federal shutdown means boats will be back out on the Bering Sea to fish for king crab. Loggers are being allowed back into national forests in Oregon. And barriers keeping nature lovers out of national parks across the country have been removed.
Crews on about 80 boats have been sitting out the multimillion-dollar harvest of red king crab because federal managers who assign fishing quotas were among workers furloughed during the government’s partial shutdown. They’re relieved that they’ll soon be able to start their harvest, bringing back an industry that was one of many private sectors of the economy stalled around the country by the bickering in Washington.
“I’m glad the madness has ended,” said Capt. Keith Colburn, a regular on Discovery Channel’s popular reality show “Deadliest Catch.”
Source: Associated Press – Associated Press: From Crab Fishers To Office Staff, Nation Reboots
After President Obama signed a cross-party deal in the wee hours of Thursday morning, hundreds of thousands of government workers returned to their jobs Thursday.
The measure reopens the government and funds operations through January 15th.
However, the deal does not include any of the budget issues that have caused the sharpest divisions between Republicans and Democrats in Congress. The lack of resolution to the division is causing continued concern around the world.
“It will be essential to reduce uncertainty surrounding the conduct of fiscal policy by raising the debt limit in a more durable manner,” International Monetary Fund head Christine Lagarde said in a statement.
Economists also say the shutdown cost the American economy billions of dollars.
“The U.S. is not doing a very good job at the moment in showing itself to be a model of good governance,” Nicholas Kitchen of the London School of Economics told the BBC.
Furloughed federal employees returned to work Thursday morning after Congress passed a hard-fought deal to end the partial government shutdown and raise the debt ceiling, as barriers went down at federal memorials and national parks re-opened.
The government was returning to normal, for now, after 16 days of a partial shutdown.
Included in the bill signed by President Obama shortly after midnight was a provision to provide back pay for furloughed workers. Many workers received a slimmed-down paycheck this past Friday due to the budget impasse — it’s unclear exactly when that money will be reimbursed. The bill stated it should be paid “as soon as practicable.”
Rep. Jim Moran, R-Va., who represents many federal workers who live in his district, noted thousands of contractors will not be compensated for lost work during the partial shutdown.
Source: FOX News – FOX News: Federal employees return to work, parks re-open
