March 24, 2017

Unemployment Rate Projection

The unemployment rate is not expected to fall to 5% until the end of 2014, reports the nonpartisan Congressional Budget Office in its summer update released August 19th [pdf.]. Additionally, the economy is expected to grow only 2% between the 4th Quarter of 2010 and the 4th Quarter of 2011. The CBO also projects the federal deficit for 2010 to be $1.34 trillion – or 9.1% of the Gross Domestic Product. The 2009 deficit, which was $1.41 trillion or 9.9% of the GDP,  is the only year since 1945 with a higher ratio to the GDP.

Comments

  1. Its hard times we live in, most economist suggest the US needs an annual growth rate of at least 3% to maintain unemployment due to population growth. Which means if things don’t turn around quickly, I’m predicting unemployment to start creeping upward.

    • I agree the unemployment rate will be going upward – probably to 9.8 or 9.9%. Reasoning is as follows – the unemployment rate was 10.0% before the census and private job growth has been very modest throughout 2010, so now that the census ends, those who were receiving unemployment benefits and went to the census are now going back to unemployment benefits. Additionally, the people who weren’t receiving or didn’t qualify for unemployment benefits before working for the census may qualify for unemployment benefits once their work on the census expires. Moreover, the broader problems underlying the employment situation or lack thereof are increasingly frugal American consumers and also a lack of demand for American goods. Unless there is a shift in these prime areas, the unemployment rate is going to remain steady at best.

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