S&P Downgrades US Credit Rating for First TimeFriday, August 6th
The credit rating agency Standard & Poor's has downgraded the U.S. credit rating for the first time ever from the country's elite triple-A status to double-A-plus.
In a statement late Friday, S&P said it made the move because the deficit reduction plan passed by Congress on Tuesday did not go far enough to stabilize the country's debt situation.
S&P also said the downgrade reflects the agency's view that the “effectiveness, stability and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges.”
U.S. media reports quote an official as saying the White House found “serious errors” in Standard & Poor's analysis of the debt ceiling plan.
U.S. President Barack Obama and Congress reached a deal a few hours before the deadline on Tuesday to increase the nation's $14.3 borrowing limit and avoid an unprecedented default on the government's financial obligations.
The downgrade comes on the same day the U.S. government announced a net gain of 117,000 jobs in July, and a slight decline in the unemployment rate to 9.1 percent. Friday's report from the Labor Department was better than economists had predicted.
The data also show the unemployment rate declined because some unemployed people gave up their job hunt in the belief that there is no work available for them. Washington does not count people as unemployed unless they are actively seeking jobs.
U.S. President Barack Obama welcomed the job gains, but said the country must do better. Mr. Obama said the economy will improve, and pledged to press Congress for legislation to create jobs when lawmakers return to Washington next month.
The U.S. is the world's largest economy, but investors have voiced little confidence in the country's sluggish recovery, even with the agreement on the debt ceiling plan.
S&P Downgrades US Credit Rating for First Time Ever
Article from VOA
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