S&P Downgrades US Credit Rating for First Time

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　　In a statement late Friday, S&P said it made the move because the deficit-reduction plan passed by Congress on Tuesday did not go far enough to stabilize² the country's debt situation.

　　S&P also said the downgrade reflects the agency's view that the "effectiveness, stability and predictability of American policymaking and political institutions have weakened at a time of ongoing³ fiscal⁴ and economic challenges."

　　Media reports citing White House officials say S&P miscalculated its projections⁵ on the U.S. debt plan by about $2 trillion.

　　U.S. President Barack Obama and Congress reached a deal a few hours before the deadline on Tuesday to increase the nation's $14.3 borrowing limit and avoid an unprecedented⁶ default on the government's financial obligations.

　　The other two major credit rating agencies, Moody's and Fitch, so far have not downgraded the U.S. credit rating.

　　The downgrade comes on the same day the U.S. government announced a net gain of 117,000 jobs in July, and a slight decline in the unemployment rate to 9.1 percent. Friday's report from the Labor⁷ Department was better than economists⁸ had predicted.

　　The data also show the unemployment rate declined because some unemployed⁹ people gave up their job hunt in the belief that there is no work available for them. Washington does not count people as unemployed unless they are actively¹⁰ seeking jobs.

　　The president welcomed the job gains, but said the country must do better. Obama said the economy will improve, and pledged to press Congress for legislation to create jobs when lawmakers return to Washington next month.

　　The U.S. is the world's largest economy, but investors¹¹ have voiced little confidence in the country's sluggish¹² recovery, even with the agreement on the debt ceiling plan.

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