Light at the end of the economic tunnel to grow brighter

There's some good news in the economy as fewer Americans applied for unemployment benefits last week. Jobless claims dropped by 6,000 with only 361,000 applying for the benefits in the first week of August. 

LOS ANGELES, Ca (Catholic Online) - Despite last month's losses, the jobs outlook continues to improve, albeit slowly. However, the growth remains sluggish and despite the uptick, the economy is still far from strong. 

The lingering European debt crisis, an uncertain political election n November, and a slowdown in the economies of Asia are putting a brake on the US economy that might otherwise be doing much better. 

Just as more Americans return to work however, inflation appears waiting. Gas prices are beginning to climb and a fire at a Bay Area refinery is already adding to the prices. Prices for housing and home loans are also up slightly. And perhaps most significantly, prices on food are rising rapidly as a crippling drought persists across the nation. 

Still, the increasing number of working Americans is good news. In addition, the trade deficit shrank slightly, another tidbit of good news. 

The long-term forecast remains where it has been for some time - stagnation dominates the future. Concluding a two-week long meeting last week, the Fed said they would leave rates unchanged and are planning to hold that rate steady through 2014. 

The economic outlook in the US may be the largest issue in the current presidential campaign. The Romney team is accusing Obama of pushing damaging economic policies that have prevented recovery, while the Obama campaign is depicting Romney as a heartless profiteer who is unfit to manage a national economy. 

However, no matter who is elected in November, it should provide some stability and predictability to the markets, which will help the economy. Investors dislike uncertainty, and as soon as the election is over and a winner declared, there will at least be an added degree of predictability for investors. 

In other words, the coming election, perhaps more than any other expected news, will do more to help the economy than anything. 

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