This decision tree from Societe Generale (via Business Insider) seems more or less correct. I think there will be a deal by Aug. 2 (or whatever the deadline ends up being). But it is the content of the final austerity plan that remains impossible to predict.
A neat chart from the Council on Foreign Relations:
The shape of U.S. labor market declines and recoveries—as measured by the current level of employment relative to the prior peak—has changed dramatically over the past two decades. From the 1940s through the 1970s, they exhibited a V-shape of sharp declines and rapid recoveries, as seen in the chart above. By the 1990s they took on a U-shape, signifying longer, persistent unemployment.
A few data points, two from today and one from last week:
— Consumer confidence fell in June to the lowest point since November 2010 on concerns about the slack labor market and sputtering recovery, according to a Conference Board report released on Tuesday. The Conference Board, a private-sector industry group, said its index of consumer attitudes fell to 58.5 in June from a revised 61.7 in May. Something more like 90 is what you want to see with a healthy economy.