Benefits stalemate weighs on the US economy

The Republican Party's opposition to extending unemployment benefits is likely to destabilise the US recovery, with as many as 200,000 jobs at risk.

Household spending is holding up reasonably well given the recent poor weather, but it will receive a considerable boost if the US Congress can stop penny pinching, get their priorities straight and extend unemployment benefits to the millions of long-term unemployed.

Real household spending rose by 0.3 per cent in January, slightly exceeding market expectations to be 2.2 per cent higher over the year. The pace of annual growth has trended upwards at a modest rate over the past year.

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