Fitch Probably Won't Stand For Another Debt Ceiling Near Miss, Maybe


Fool Fitch Ratings once, shame on you. Fool it twice, uh, shame on you, or someone else, again, or something. Fool it three times, and it might begin to consider whether you actually still deserve that triple-A rating that it probably would (should?) have already taken away if it weren't trying to keep its legal bills down right now.

Fitch put the United States on 'Ratings Watch Negative' on Oct 15, meaning a downgrade is already more likely than not. Fitch will decide on whether to lower the rating by March 31 next year.

"Nothing is pre-determined, but that wouldn't be a good signal if we have that kind of outcome again," Ed Parker, lead U.S. analyst and head of EMEA sovereign ratings at Fitch Ratings, told Reuters in a TV interview….

Parker was referring to the 16-day partial shutdown of the government and last-minute agreement between Republican and Democrat lawmakers on Oct 16 to raise the country's $16.7 trillion borrowing limit, thus narrowly avoiding a default.

On a related note, we hope you were not looking forward to today's jobs report. Or counting on it to mean anything next Friday.

The monthly jobs report will be delayed one week until next Friday because of the partial government shutdown. When it does come out Nov. 8, economists caution that a portion of the data could be temporarily skewed….

First, the survey asks people what they were doing during the week of Oct. 6 to Oct. 12, at the height of the shutdown.

BLS said that workers who indicate that they weren’t working during the entire survey reference week should be classified in the household survey as unemployed, even if they expected to be paid for the time off or recalled to their jobs. They would be categorized as on temporary layoff….

The second factor may be faulty memory. Typically, Census would have started asking households about their employment status starting on Oct. 13 — immediately after the reference week — but that was delayed because of the shutdown. Instead, data collection started on Oct. 20.

Repeat of debt row 'wouldn't be good signal' for rating: Fitch [Reuters]
No Jobs Data Until Next Friday, and Even Then Will Be Messy [WSJ Real Time Economics blog]