Well the last minute end to the Washington showdown on the government shut down and raising the debt ceiling crisis brought to the world by the Tea party Republicans has ended, thankfully at least until next February. There is certainly no evidence that the right wing libertarian faction of the Republican party has drawn any sensible lessons from the near debacle to which they subjected the U.S. and the rest of the globe over the past month. Not only do they continue to insist that they were right to behave as they did but they threaten to do it all over again if they don’t get their way over entitlement reform and fiscal austerity. They have already won a victory over the continuance of the sequestration cuts which will bite even harder come January. Given these events and the agreement to negotiate further cuts in basic welfare and well being programs over the coming months and years, it is difficult to maintain high confidence over the US and global recovery over the coming year. Yet, despite the damage already done and the prospects of further trouble ahead in the near future the economy continues to grow albeit at a very slow pace and the unemployment rates continue their very slow downward trajectory. Unemployment in Canada has fallen to 6.9 % and the rate for August in the U.S. was 7.3 % with it falling in 311 out of 372 census metropolitan areas. According to the U.S. Bureau of Labour Statistics
Yuma, Ariz., and El Centro, Calif., had the highest unemployment rates in August, 32.6 percent and 26.3 percent, respectively. Bismarck, N.D., had the lowest rate, 2.4 percent. A total of 207 areas had August unemployment rates below the U.S. figure of 7.3 percent, 158 areas had rates above it, and 7 areas had rates equal to that of the nation.
So the situation is still far from perfect. The inflation front is stable and showing no sign of changing anytime soon. U.S. C.P.I. inflation over the past year has been 1.5 %. In Canada the rate is
even lower 1.1 %. This suggests that the economy is still in need of more stimulus which sequestration cuts will not provide.