The United States has lost its coveted top AAA credit rating. Credit rating agency Standard & Poor’s has downgraded the nation’s rating for the first time since the U.S. won the top ranking in 1917.
S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about growing budget deficits. the outlook was also rated as negative, which means the organization expects the rating could go down another notch in the next 12 to 18 months.
The news released late Friday follows the worst week in U.S. stock market in two years.
For the week, the Dow dropped 5.75 percent — its largest weekly decline since March 2009.
The S&P dropped 7.18 percent, and the Nasdaq fell 8.13 percent, posting their biggest fall since November 2008.
Barack Obama was inaugurated January 20, 2009. In November 2008, during the presidency of George W. Bush, over 500,000 jobs were lost, which marked the largest loss of jobs in the United States in 34 years. The Bureau of Labor Statistics reported that in the last four months of 2008, 1.9 million jobs were lost. By the end of 2008, the U.S. had lost a total of 2.6 million jobs.
Standard & Poor’s (S&P) is a United States-based financial services company — a division of the McGraw-Hill Companies that publishes financial research and analysis on stocks and bonds. Standard & Poor’s is one of the Big Three (credit rating agencies, including Moody’s Investor Service and Fitch Ratings. AAA is the rating for the best quality borrowers — reliable and stable (many of them governments). AA is the rating for quality borrowers that are a bit higher risk than AAA.
The S&P 500 stock market index, maintained by Standard & Poor’s, comprises 500 large-cap American companies covering about 75% of the American equity market by capitalization.
The National Bureau of Economic Research is expected make the official announcement of a U.S. recession in the next one-to-six months.
The media will pound this into the ground surely contributing to another recession.