Good and bad news from United States: while the June trade deficit helped by strong farm and manufacture goods exports fell to an unexpected 56.8 billion US dollars, the July federal budget deficit soared to 102.8 billion pushed by the economic stimulus payments and more outlays to protect depositors from failed banks.
The United States budget deficit is expected to reach 400 billion US dollars in 2008, according to estimates from the Congressional Budget Office.
Freddie Mac, which offers funding for a huge proportion of United States mortgages, has posted a quarterly loss amid continued problems in the housing market. As mortgage defaults climb and house prices sink, it made a loss of 821 million US dollars in the three months to the end of June, down from a profit of 729 million.
Consumer spending in the United States slowed in June, while inflation in June was the highest since 1981. Inflation-adjusted spending fell 0.2% in June, according to the US Commerce Department.
The Federal Reserve decided on Tuesday to keep the key interest rate unchanged at 2% in support of a slowing economy threatened by inflationary pressures and the ongoing housing contraction and high fuel prices.
General Motors reported on Friday a net three-month loss of 15.5 billion US dollars as North American sales fell by 20%. GM took a 3.3 billion charge for buying out the contracts of 19,000 hourly workers who left at the end of June.
The United States unemployment rate increased to a four-year high in July according to a Labor Department report issued Friday which shows 5.7% of the US workforce is out of a job, a slight increase from June.
The US economy has been boosted by the government's 168 billion stimulus package, according to the US Treasury Secretary Henry Paulson. Official figures showed that gross domestic product (GDP) rose at an annual rate of 1.9% between April and June, up from 0.9%.
United States President George W. Bush signed Wednesday into law a bill designed to help struggling homeowners and prop up the battered US housing market. The new law creates a 300 billion US dollars rescue fund to help thousands of homeowners get cheaper loans.
New York governor David Paterson admitted the state economy was in recession and announced spending cuts to face a steep budget deficit due to declining tax revenues. Paterson said that he would ask the legislature to approve another 600 million US dollars cut in an emergency session.