Facing reelections in a little more than a year, Barack Obama is expected to call for substantial investments in the U.S. faltering infrastructure. He may also call for another extension of benefits and allowances to stimulate consumer spending. However, the Republicans are likely to oppose Obama’s proposals being greatly concerned about public expenditures. The White House lowered its economic forecast on Thursday and claimed that unemployment level would probably average 9% until 2012.
Head of the Fed Ben Bernanke announced a week ago that the Fed could not mitigate U.S. problems including unemployment level and weak real estate. In other words, he sent a signal to Obama and the Congress to take responsibility for strengthening the economy. In case they assume that responsibility, the Fed will retain its right to intervene if the U.S economy seems in danger because of the Government’s non-feasance. Several chiefs of the central bank announced their readiness to consider a possibility of a third round of quantitative easing at the last Fed session on August, 9.
According to a report released on Friday, 42.9% of Americans, which is 6.0 mln people, had been unemployed for more than 6 months as for August. The longer they are unemployed, the more difficult it is for them to find a job.
The report revealed cuts in Americans’ revenues that are important factor to increase spending and support the economy. Average hourly earnings dropped $0.03 to $23.09 in August. It increased marginally 1.9% last year.