The Fitch ratings agency has placed the United States’ current triple-A credit status on a tentative “rating watch negative” status amid uncertainties over debates on Capitol Hill, as lawmakers look to avoid default by hashing out a deal to raise the nation’s debt ceiling.

U.S. Treasury officials and other business and economic leaders have been warning for weeks that the U.S. could default on its financial obligations as soon as June 1 if some type of deal on the budget ceiling is not reached.

Default could lead to significantly higher interest rates and severe disruptions to financial markets, with the Fitch warning providing added urgency for a deal. Fitch indicated late Wednesday that it would downgrade America’s credit rating if a deal is not reached by the Treasury Department’s June 1 deadline to raise or suspend the debt limit.

Spending cuts being proposed by Republicans remain at the crux of ongoing talks between the White House and members of Congress.

“Those sensitive issues are the thorniest issues that we’ve been discussing,” Republican negotiator Rep. Patrick McHenry said during a news briefing at the Capitol Thursday, according to several news outlets. “Everybody’s trying to do a fine job of figuring out the finer details of this, but nothing’s done.” 

Sales of single-family homes under contract to be sold registered no change in April from the prior month and declined 20.3% from year-earlier levels, among several lingering signs of a housing market slowdown, the National Association of Realtors reported Thursday.

“Not all buying interests are being completed due to limited inventory,” NAR Chief Economist Lawrence Yun said in a statement. “Affordability challenges certainly remain and continue to hold back contract signings, but a sizeable increase in housing inventory will be critical to get more Americans moving.”

Apartment renters are among prospective buyers holding back on purchasing homes, based on factors including home pricing, high mortgage rates and limited inventory of homes available for sale.

There were substantial regional differences in the latest pending-sales numbers, though all four regions saw year-over-year declines. The NAR noted noted deals under contract in the Northeast dropped 11.3% from the prior month and declined 21.8% from April 2022. The Midwest posted a 3.6% rise for the month but dropped 21.4% for the year.

The South’s pending home sales rose 0.1% for the month while sinking 16.7% for the year. The West’s pending sales rose 4.7% for the month but dropped 26% for the year.

Initial claims for unemployment for week ended May 20 totaled 229,000, rising 4,000 from the prior week in what remains a tight U.S. job market by historical standards, the Labor Department reported Thursday.

The four-week average for initial claims was 231,750, unchanged from the prior week.

Continuing claims in all programs, tracked on a more delayed basis, totaled about 1.6 million for the week ended May 6, down 48,031 from the prior week but higher than the 1.3 million claims for the comparable week of 2022.

Researchers at consulting firm Oxford Economics said in a statement Thursday that initial claims came in lower than expected in the latest government report. The firm said initial claims “have mostly moved sideways” after climbing through much of the first quarter, “a reminder that labor market conditions are still tight.”

That could influence the Federal Reserve’s future decisions on interest rate hikes after a series of increases over the past year. Oxford Economics expects the Fed to leave rates alone at its next meeting in June, though the firm said minutes from the Fed’s May meeting “made clear that a more significant loosening of labor market conditions is needed to keep rate hikes permanently off the table.”