The
Fitch Ratings credit-ranking company is warning it may lower the United
States’ credit rating if U.S. lawmakers fail to agree on a plan to
reduce the country’s ballooning budget deficit next year.
The credit agency said Monday the U.S. will keep it’s top-tier AAA
credit rating for now. But the company lowered the outlook on the credit
rating from “stable” to “negative,” saying it is losing confidence the
government will take the necessary steps to lower the deficit.
Last week, a bipartisan committee of congressman announced it had not
been able to reach an agreement on cutting $1.2 trillion over the next
ten years. The failure triggers massive automatic cuts to defense and
domestic programs beginning in January 2013.
The
other two major ratings agencies left their ratings unchanged in the
wake of the committee’s failure. But in August, Standard & Poor’s
downgraded the U.S. from AAA to AA+, with a “negative” outlook, while
Moody’s is also threatening to lower the U.S. from it’s AAA rating if
budget cuts are not made.
Despite the negative economic news, U.S. consumers were expected to set
a new record for on-line sales Monday as retailers offer deep discounts
to lure shoppers buying things for Christmas gift-giving in late
December.
Experts and investors watch retail sales closely because consumer demand
drives about 70 percent of U.S. economic activity. The U.S. economy is
the world’s largest, and is a key market for many exporters around the
world.
Two groups that track on-line sales predict they will set a record on
what has become known as “Cyber Monday” when shoppers return to work
after a the long Thanksgiving holiday weekend. The National Retail
Federation predicts that 122 million Americans will shop on-line Monday,
including many who use their computers at work for this purpose.
The prediction of strong on-line sales follows Friday’s record-high
sales figures from traditional stores. Analysts at ShopperTrak say sales
on the day known as “Black Friday” jumped 6.6 percent from the same day
a year ago, and represented $11.4 billion in retail purchases.
Merchants call the day after the U.S. religious and patriotic holiday of
Thanksgiving “Black Friday.” For many stores, it is the day when they
change from loss to profit for the year. The name comes from the
tradition of recording losses in red ink, and writing profits in black.
U.S. retail sales have been hurt by the economic crisis, high
unemployment, and worries about the economic future. Many merchants say
deep discounts and heavy advertising have apparently persuaded cautious
consumers to spend money.
But some analysts warn that sales could decline once the “Black Friday”
and “Cyber Monday” promotions end.
