U.S. Retains Stable Outlook on Unchanged Unemployment Rates

Fitch Ratings affirmed its AAA rating on debts and currency issued by the United States, saying that their outlook for the U.S. economy is “stable”. The ratings agency said American has “unparalleled” financing flexibility driven by the U.S. dollar’s status as the world’s most in-demand reserve currency. This currency demand affords America the flexibility to issue more debt and to raise the nation’s total debt load, the agency said, despite concerns that American sovereign debt levels have become unsustainable.

Fitch Ratings affirmed its AAA rating on debts and currency issued by the United States, saying that their outlook for the U.S. economy is “stable”. The ratings agency said American has “unparalleled” financing flexibility driven by the U.S. dollar’s status as the world’s most in-demand reserve currency. This currency demand affords America the flexibility to issue more debt and to raise the nation’s total debt load, the agency said, despite concerns that American sovereign debt levels have become unsustainable.

Fitch also cited GDP per capita levels and human development standards above AAA median, adding that America has “one of the most productive, dynamic and technologically advanced [economies] in the world, underpinned by strong institutions and a favorable business climate.” Fitch also noticed that fiscal consolidation and a declining Federal government budget deficit, which has fallen from 9.9% in 2009 to 2.9% in 2014, is also helping the U.S. economy stabilize and offering the government room to issue more debt.

“The US recovery is outpacing that in most advanced countries, albeit sluggish by its own historical standards,” the ratings agency noted. The nation’s financial sector risks were judged to be “low” while GDP growth is set to rise, but remain at moderate levels. “Fitch’s projections also assume that the medium-term growth potential of the US economy is 2.2%; and that state and local government budget deficits remain the same as a percentage of GDP,” said the agency.

Unemployment Rates Stay High

Despite Fitch’s optimistic view of Federal indebtedness and the general pace of economic recovery, the Bureau of Labor Statistics saw unchanged unemployment in its most recent Regional and State Employment and Unemployment Summary report.

“Twenty-four states and the District of Columbia had unemployment rate increases from July, 15 states had decreases, and 11 states had no change,” the BLS reported. Additionally, the national jobless rate remained at 6.1 percent in August, as in July, but that level indicated a 15.2% drop in unemployment from a year ago.

Georgia had the highest unemployment rate, at 8.1%. North Dakota’s rate was the lowest, at just 2.8%.

Analysts believe that greater economic uncertainty abroad may boost the Unites States’ credit rating on a relative basis. America lost its best credit rating in a historic move in 2011, but it is expected to regain that rating by 2020.