- Chris Van Hollen, the top Democrat on the House Budget Committee
The Congressional Budget Office expects the U.S. economy to grow by just 1.5% in the whole 2014, impaired by a weak performance during the first three months of the year. The new economic forecast was considerably more gloomy than the Obama administration's, which predicted last month that the economy would grow by 2.6% this year even though it contracted by an annual rate of 2.1% in the first quarter. The world's number one economy, however, did grow by 0.9% during the first half of 2014. Preliminary GDP data is scheduled for today, with economists forecasting a 3.9% growth. However, growth in the gross domestic product, the economy's total output of goods and services, bounced back in the second quarter, advancing at an annual rate of 4%, according to the government's first estimate.
Looking ahead, the CBO said it saw the economy expanding by 3.4% over 2015 and 2016, and predicted that the jobless rate would remain below 6% in the future. The CBO also projected that the government would face a deficit of $506 billion for the budget year that ends September 30. That would be the lowest level of Barack Obama's presidency. Obama inherited a recession and a trillion-dollar-plus deficit, when he took office in the aftermath of the 2008 fiscal crisis. The U.S. economy has recovered more slowly than expected; some of the recent decline in the unemployment rate is due to frustrated job-seekers leaving the labour market.
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