Forex - 3 Reasons the US Economy Is Still In Trouble, Post Debt Deal

(ForexTV.com)- The US economy is facing strong headwinds currently as data this week showed manufacturing faltering in July and consumers retrenching in June. While those factors impact current growth and give us a sense the 3rd quarter is starting off weak, in 2012 the economy will face the unwinding of government stimulus measures that will shave off around 1.5% of growth during the next year.

1. Gov’t Stimulus Spending to Come to an End

While the debt deal envisions only small cuts from the 2012 and 2013 budgets with most of the initial $917 billion in spending cuts back loaded- it would reduce government outlays by $21 billion in the fiscal year that begins Oct. 1st and by $42 billion in the following year – the deal does not have attached to it any stimulus measures that may help an ailing economy. Read more here…