ForexNewsNow – With the specter of a double dip recession lingers in the backs of everyones’ minds, forex analysts anxiously await both US President Barack Obama’s speech on a job stimulus package and the launch of new monetary policies from the Federal Reserve in Washington and the European Central Bank in Frankfurt.
But what can we really expect from tomorrow’s speech in Congress in the middle of a global debt crisis?
Facing staunch disapproval ratings as a result of the current economic turmoil, tomorrow Obama is expected to propose spending $300 billion for job creation in the United States. The two main decisions for 2012 are likely to be a one-year extension of the payroll tax cut and an extension of expiring unemployment benefits costing altogether around $170 billion.
However, all these new costs should be fully offset by budget cuts according to White House advisers, who repeatedly claimed that these decisions will have a “quick and positive” impact on the US job market. Nevertheless, there is room for skepticism since the US unemployment rate has been higher than 9% for months now and the country did not create a single job in August.
Crisis of political confidence
Americans’ confidence in Obama’s ability to turn the economy around has been waning since the beginning of the debt crisis and the Democratic president is hopeful that his speech on Thursday will help him reverse that trend.
Here is a short overview of the most recent poll numbers in the United States:
- One in three Americans believes that the US financial situation has worsened since Barack Obama’s arrival to the White House.
- In a NBC News / Wall Street Journal poll published on Tuesday, Obama’s popularity reached its lowest level ever at 44%.
- In another ABC News / Washington Post survey, six in ten Americans negatively view the way the president is managing the economy and the labor market.
If Obama wants to increase his chances of reelection in November 2012, he must reduce unemployment immediately. Above all, he will have to convince a largely hostile House of Representatives to accept new public spending measures while many elected officials have made patently clear they will reject any new government spending.