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White House: New Budget Deal Will Boost Jobs

FILE - Specialist Michael O'Mara works on the floor of the New York Stock Exchange, Aug. 25, 2015.
FILE - Specialist Michael O'Mara works on the floor of the New York Stock Exchange, Aug. 25, 2015.

White House economic officials say a tentative budget agreement with Congress could boost job creation by 340,000 workers next year and even more in the future.

Council of Economic Advisers Chairman Jason Furman writes the two-year bi-partisan budget agreement "reduces the recent policy uncertainty that weighed on economic growth."

The deal follows weeks of negotiations and averts the economic consequences that could come from the threats of default on government debt or a partial shutdown of government operations.

The deal comes as top officials of the U.S. central bank are meeting in Washington to consider how soon and how much to raise the key interest rate.

Federal Reserve officials are scheduled to announce their decision Wednesday. Many economists say faltering U.S. economic growth and low inflation make it unlikely the Fed will raise rates now.

Raising interest rates would boost the value of the already strong U.S. dollar. That makes U.S.-produced goods more expensive and hurts exports, and the economic boost they provide. U.S. exports are already being hurt by slowing growth in many foreign markets.

Some economic reports published Tuesday were disappointing, including a measure of business investment that fell four-tenths of a percent in September. Less investment in long lasting manufactured goods makes future economic growth less likely. Wells Fargo economic analysts called the report on the factory sector "a dud."

A separate study of consumer confidence also dropped slightly, perhaps because of a recent slowdown in job creation. Economists watch consumer confidence closely because consumer demand drives most U.S. economic activity.

One bright spot in the flurry of economic data came in the housing sector, where prices rose at a steady pace in August from a year earlier. Severe problems in the housing industry were a key reason for the financial crisis, and economists watch the sector closely.

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