A global rating agency says it may consider downgrading the credit rating for the United States if bickering politicians cannot reach an agreement to raise the debt limit.

Moody’s Investor Services says the political wrangling over debts and spending has “exceeded expectations.”

Current law limits U.S. government debt to about $14.3 trillion, but that limit has been reached. Unless Congress votes to increase the debt limit, the Treasury cannot issue more bonds to finance expenses.

Most of President Barack Obama’s Democratic Party allies in Congress want to allow increased borrowing. Opposition Republicans say they will not support an increase unless there is also a deal to sharply cut spending.

The two sides have until August 2 to reach a deal. A rating downgrade would prompt lenders to raise the interest rates they charge on U.S. debt, which would make it more expensive to repay those loans.

Earlier Thursday, a report showed the number of Americans signing up for unemployment compensation dropped slightly last week. A separate study showed that the productivity of U.S. workers grew in the first few months of this year, but the growth was slower than that seen in the last few months of 2010.

On Friday, government experts plan to publish the unemployment rate for May. Economists surveyed by news organizations predict the unemployment rate will decline slightly and hit 8.9 percent. Economists also expect the U.S. economy will show a net gain of 150,000 jobs in May.