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The biggest obstacles to faster U.S. growth vary from tepid job and pay growth to the lingering squeeze from a Social Security tax increase and government spending cuts to doubts about whether Congress will raise the government's borrowing cap. If the cap isn't raised, the United States could default on its debt by mid-October. That would risk a downgrade of U.S. credit. The U.S. unemployment rate won't return to a range associated with a healthy economy
-- roughly 5 percent to 6 percent -- before 2015 and perhaps not until 2016 or later. The rate is now 7.3 percent. It rose as high as 10 percent during the recession and has been falling steadily. But the rate has been falling, in large part, for a discouraging reason: More people have stopped looking for work. Once people without a job stop looking for one, the government no longer counts them as unemployed. Congress should not increase the federal minimum wage of $7.25 an hour. Some economists warn that a higher minimum wage could lead some employers to hold back on hiring lower-wage workers. That could escalate unemployment, they say. The economists' dim outlook for the recovery in many advanced economies coincides with a slowdown in some key emerging economies after years of powerful growth. China's growth, for example, slowed in the second quarter to 7.5 percent
-- explosive by the standards of developed countries but the slowest pace for China in two decades. The economists surveyed by the AP foresee little change through 2014. The economists note that aging populations may be holding back growth in Japan and Europe. As older workers retire in greater numbers than younger workers can replace them, workforces shrink and economic growth tends to slow. Prime Minister Shinzo Abe has sought to revive Japan's moribund economy by boosting government spending and pushing the Bank of Japan to launch its own bond purchases. Those efforts led to a burst of growth in the first half of the year. But economists worry about the effects of a higher consumption tax that's set to take effect next year. In 1997, Japan raised taxes on consumers -- a move that many economists think stifled a nascent economic recovery. "People are a little spooked about what that means this time," Webman said.
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