The Congressional Budget Office said it expects the U.S. economy to stagnate this year with the unemployment rate jumping to 5.1%.
Ford Broncos line the front of Gus Machado's Ford dealership Monday, Jan. 23, 2023, in Hialeah, Fla. On Thursday, the Labor Department releases the producer price index for January, an indicator of inflation at the wholesale level that's closely monitored by the Federal Reserve. – The Congressional Budget Office said Wednesday that it expects the U.S. economy to stagnate this year with thejumping to 5.1% — a bleak outlook that was paired with a 10-year projection that publicly held U.S.
The latest figures seemed to affirm the worst fears of many U.S. consumers and businesses. But in a reminder that the U.S. economy has seldom behaved as anticipated through the pandemic and its aftermath,The CBO estimated that just 108,000 jobs will be added in 2023, but employers added 517,000 jobs in January alone. It also assumes that inflation will ease from 6.4% to 4.8% this year, far more pessimistic than Federal Reserve officials who in December said inflation would fall to 3.5%.
Following the CBO issuing its report, Senate Democrats reiterated their calls for Republicans to help pass legislation to increase the nation’s borrowing authority. Then, they said, lawmakers could turn their attention to funding the government and addressing the solvency of Medicare and Social Security.
“If we don’t get serious about reining in spending, reducing annual budget deficits and bringing down the debt, the country will end up spending more on interest payments than the programs that actually benefit Americans,” Grassley said. The two parties also engaged in blaming the other side for the rising deficit projections. Republicans blamed Democrats for spending too much during the Biden presidency and Democrats blamed Republican for the tax cuts undertaken during the Trump presidency.
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