Uncertainty Prevails in U.S. Economic Outlook

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The economy and government spending are the top issues in this year's midterm congressional elections.

A new report by the Labor Department said the September unemployment rate held steady 9.6 percent.

Even if things improve in the short term, economists are worried about the longer-term economic outlook. Judging by the way business owners are holding on to their cash, they're worried too.

"They're not spending that on hiring new workers though, because they're uncertain of the economic future," said Dan Arnall, ABC News business editor.

The Congressional Budget Office estimates the deficit will be at $1.3 trillion for the year, the second-largest ever. Last year's $1.4 trillion deficit was the largest in history.

The current deficit means the government borrowed 37 cents out of every dollar it spent. The deficit is three times larger than what economists said the country can sustain over the long term. That's just one of many things that's hurting business confidence.

"Confidence is key," said Mark Zandi, chief economist of Moody's Analytics. "If people don't feel good the economy just isn't going to gain traction so it's very very important that people start to feel better about things because until we do the economy is going to struggle."

Republicans argue that the infamous stimulus bill hasn't lived up to its promises and now we've learned some of the money was wasted.

All Americans receiving Social Security benefits received government checks in the amount of $250 during this year. The idea was to stimulate spending, but the Social Security Administration's Inspector General has discovered that more than 89,000 stimulus payments of $250 went to people who are dead or in prison.

Apparently, $18 million was sent to 72,000 people who are dead and $4.3 million went to 17,000 prison inmates.

Some inmates who received Social Security checks before they were locked up were eligible to receive the payment. The deceased, however, were not and there are no provisions in the law to recover payments incorrectly sent to dead people.

The huge deficit and ongoing concerns about the weak economy are bringing down the value of the dollar. It fell to a 15-year low this week against the Japanese yen.

That happened as world markets expected the Federal Reserve to buy government debt to lower interest rates and pump more money into the system to try to bring the economy back.

Some analysts hope that move and other measures will help.

"The economy is moving in fits and starts, sometimes we'll feel good, sometimes not quite as good," Zandi said. "But we're moving in the right direction."

Friday's jobless numbers are the last report before the midterm elections. For Democrats, it's another reminder of the uphill battle they face in congressional districts across the nation.

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CBN News
Jennifer Wishon

Jennifer Wishon

CBN News White House Correspondent

Jennifer Wishon is the White House correspondent for CBN News based in the network’s Washington, D.C. Bureau.  Before taking over the White House beat, Jennifer covered Capitol Hill and other national news, from the economy to the 2010 oil spill in the Gulf of Mexico. Follow Jennifer on Twitter @JenniferWishon and "like" her at Facebook.com/JennWishon.