The U.S. jobless rate just hit its lowest level since 1969, but the Congressional Budget Office is projecting a stagnant economy that may push unemployment to its highest since September 2021, when the nation was recovering its footing from the pandemic.
The unemployment rate could jump to 5.1% this year from its January level of 3.4%, the lowest in more than a half century, according to the nonpartisan organization, which provides independent analyses of budget and economic issues to Congress. A jump in unemployment of that size would imply that hundreds of thousands of people who are currently employed would lose their jobs.
"Over the long-term, our projections suggest that changes in fiscal policy must be made to address the rising costs of interest and mitigate other adverse consequences of high and rising debt," Phillip Swagel, the CBO's director, said in a statement.
The outlook warns about rising yearly budget deficits. In 2033, the CBO anticipates that the yearly shortfall in tax revenues relative to spending would exceed $2.85 trillion, more than double the deficit in 2022. Publicly held debt was roughly equal to U.S. gross domestic product in 2022, but it would climb to 118% of GDP by 2033.
Social Security will spend $412 billion more, or 2%, over the next decade than previously forecast partly due to higher inflation, the CBO said.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 employment forecast looks very different from the pace of hiring so far this year.
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