By: Lissette Saca
July 29, 2011 8:00pm

3 days left. Just 3 days for the debt ceiling to be raised in order to avoid a default on our nation’s debt. Today the house passed the GOP debt plan and now the vote moves on to the senate for approval. Though it seems that we are moving forward in the debates, there is already speculation that the debt bill is DOA before it even gets to the senate, largely in part because the senate is mostly democratic (none of which seem to support the bill). The debates in Washington have not only caused a stir amongst law makers, they have also piqued the interest of Americans who wonder how what is decided in the next few days will affect them and their wallets.

One word that has been used in the debate which has sparked the interest of Americans and has made the debate personal is credit rating. There are three credit rating agencies which determine the country’s credit rating: Moody’s, Standard and Poor’s (S&P), and Fitch Rating. The US has consistently earned a AAA credit rating since the founding of Moody’s in 1909, a rating which was in jeopardy a short while ago. Towards the beginning of the debt ceiling debate and amidst possible talks of default (though now that possibility seems unlikely) credit agencies reported that if a debt deal was not reached soon, they would be forced to downgrade the nation’s credit rating. As the debate progresses, however, credit rating agencies have stated that the US is likely to keep Moody’s AAA credit rating though agencies might instead shift the US outlook to a negative one in order to indicate the uncertainty faced by the US in recent debt talks. And while this may not affect the US as much as a change in its credit rating, it will increase caution on the part of lenders and the effects on your wallet may be felt soon.

It is thanks to the US’s AAA credit rating that the nation benefits from having the lowest lending risk and therefore, the lowest interest rates than in other countries. Without that top rating, lending becomes riskier, forcing lenders to demand a higher rate of return on their investments through the use of higher credit card rates, student loans, mortgages and car loans. CNNMoney article “Debt Ceiling and your Money: Now it’s Getting Personal” breaks down each of the above categories and explains when you will notice the higher rates. And though not all are immediate, they will all be felt. It is crucial for the American people to become involved with the decisions that are made in Washington, as they will directly impact how you interact with your lenders and, often, where your hard earned dollars go.

By: Lissette Saca
July 22, 2011 6:00pm

From unemployment to housing price levels and government policy debates, this week has been a very interesting one. Here is a quick look at the numbers and headlines that made news this past week.

Employment: Despite an overall decreasing trend in unemployment levels, yesterday’s Jobless Claims Report stated that the number of individuals who filed for unemployment for the week of July 16th increased to 418,000 from a previous 405,000 from the week before. When looking at levels of unemployment, it is always important to look at the big picture (or what is commonly known as the long-run). Because unemployment levels can vary significantly from week to week, there exists a much more accurate depiction of the “actual” level called the 4-week moving average. This average provides a number which accounts for volatility in the weekly unemployment levels which may have been caused by external factors such as significant layoffs from one single company. Therefore, despite the increase in this week’s unemployment levels, long-run levels of unemployment show that the number of jobless claims filed has, in fact, decreased from 423,250 to 421,250 within the last four weeks. Having said that, what does this week’s number mean? Well…. It means that more individuals filed for unemployment this week when compared to last week. However, looking at the 4-week moving average, the overall level of unemployment decreased and there is an overall declining trend in the number of filed jobless claims. Things are looking up in this economic indicator overall!

Housing: Housing continues to be the slowest of all the economic indicators to recover. Existing home sales continued to decrease, even below consensus levels, for the month of June. Nevertheless, there is some good news. Home price levels released by the Federal Housing Finance Agency for the month of May showed a slight increase in the average price of homes on the market; a welcome change from previous weeks. What does it all mean? In analyzing the numbers and their overall trends, the housing sector is still in a lag. Homes are now increasing in value; however, they are not selling. This can be a problem for anyone who is in the home buying market. The increasing price of homes may be a leading reason why home sales are in decline. And with the increasing volatility of the recent unemployment levels, many can no longer afford to purchase their dream home.

Government Policy Debate: “Raising the debt ceiling” and “debt ceiling default” have been a few of the most talked about topics and phrases this past week. Heated talks and exchanges have occurred in Washington D.C. as the August 2nd deadline for the government to increase the nation’s debt ceiling to avoid defaulting on its debt approaches. The crucial question: Can a debt compromise be reached? Many states don’t seem to think so and are bracing for a debt ceiling default, despite the fact that government officials have not reached an agreement on whether to raise the debt ceiling (or because they have not done so). Many states have begun to take out loans to ensure that they have enough to cover their requirements. Contingency plans are being put in place by various states so that they can get their slice of the pie (which comes in the form of money that the federal government pays individual states for services such as education, Medicaid, transportation and others). However, if there is no agreement reached and the debt ceiling is not raised, that money may never come. Regardless of individual positions on the subject, or of the arguments that are taking place, we will have our answer on August 2nd. So let’s brace for impact!

And that’s your week in review!

By: Lissette Saca
July 11, 2011 11:00am

10, 9, 8, 7, 6, 5, 4, 3… 2…1… lift off! Friday at 11: 29am EST, despite weather concerns, the shuttle Atlantis took off on its final voyage to space. The launch marked the end of the 30-year NASA Space Program. But what exactly does it mean for Florida’s economy now that space enthusiasts will no longer be flocking to Kennedy Space Center to watch shuttles lift off?

It is estimated that about one million people, tens of thousands of them tourists to Florida’s Space Coast, saw the shuttle Atlantis take off. The local hotel and dining sectors of the Space Coast saw fully-booked rooms and restaurants as tourists flocked to become part of history. Nevertheless, because of the end of the Space Program, the local Space Coast and the entire state of Florida will now see a decrease in their sales. Previous launches have allowed for a peak in sales, even during times of financial hardship for the country. Without the program, both the Space Coast and Florida will see a reduction in their annual revenues, something that can cause financial hardships for businesses that rely on the traffic that comes with shuttle launches.

What about the businesses that work as subcontractors for the space program? Local suppliers for NASA projects will also be feeling the hit of the end of the 30-year NASA Space Program. They have been a large part of the support for the local economy since the program began and are now facing the threat of layoffs; and however slight the number of workers who are laid off, Florida will definitely see a slump in their economy.

Nevertheless, there is still hope for Florida and those who thrive from its economy. In three simple words….the next frontier. President Barack Obama has announced that he wants the United States to continue to be the world’s leading space explorers. To be able to continue to explore space, there need to exist new technologies that are not yet available. To make the dream of further space exploration possible, Obama stated in April that $40 million will be made available to the Space Coast region. This funding will promote economic growth and job creation in the area and will hopefully attract new scientists and innovators to come to the area and contribute to the exploration of the next frontier.