x

Economy

Budget Office Projects 4.6% Growth in Biden’s First Year

February 1, 2021

The Congressional Budget Office expects the U.S. economy will grow at a 4.6% annual rate this year, with employment returning to pre-pandemic levels in 2024.

The 10-year outlook issued Monday said the economic recovery from the coronavirus has been boosted by an unprecedented wave of government spending to combat the outbreak, such that growth could pass its maximum sustainable level in early 2025 before returning to a long-run average of 1.7%. Based on the CBO's projections, economic growth would be the strongest since 1999.

While the growth estimates suggest a quick snapback in gross domestic product, the CBO shows that hiring will occur at a lag as consumer spending returns and employers become more comfortable with adding workers. The CBO projected that an average of 521,000 jobs will be added monthly this year, a pace that would fall to 145,000 in 2022.

Congress has spent $4 trillion to keep the economy stable since the pandemic shuttered schools, offices, restaurants, gyms and other businesses, leading to roughly 10 million job losses and an economic decline of 3.5% last year. 

The CBO estimates factored in the roughly $900 billion approved in December, but they excluded President Joe Biden's $1.9 trillion plan because the projections are based on current law.

Biden's supporters can point to the CBO's projection of a three-year recovery in hiring as a need for more aid. But Republican lawmakers can simultaneously argue that less money is needed to boost the economy because the CBO estimates that the total economy will return to its pre-pandemic size in the middle of this year.

A group of 10 Republican lawmakers has countered the Biden plan with a $618 billion proposal that focuses on vaccinations, testing and direct payments to individuals earning less than $50,000 and couples earning less than $100,000. Biden is meeting with the lawmakers on Monday, possibly determining whether an aid package can be supported by members of both parties.

The CBO cautioned that its projections are highly uncertain, in large part because of the pace of the vaccinations and the risk of new variations of the coronavirus. A faster vaccination process — the goal of both aid proposals — would help hiring and growth.

A separate measure of economic growth in the CBO report that compares the fourth-quarters says growth would be 3.7% this year, a partial reflection of some of the gains that have already occurred in the middle of last year. 

RELATED

WASHINGTON — A measure of inflation that is closely tracked by the Federal Reserve jumped 6.

Top Stories

General News

FALMOUTH, MA – The police in Falmouth have identified the victim in an accident involving a car plunging into the ocean on February 20, NBC10 Boston reported.

General News

NEW YORK – Meropi Kyriacou, the new Principal of The Cathedral School in Manhattan, was honored as The National Herald’s Educator of the Year.

General News

PHILADELPHIA – The Federation of Hellenic Societies of Philadelphia and Greater Delaware Valley announced that the Evzones, the Presidential Guard of Greece will be participating in the Philadelphia Greek Independence Day Parade on March 20.

Video

Woman Fatally Shot while Pushing Stroller on Upper East Side

NEW YORK — A 20-year-old woman was fatally shot Wednesday night while she pushed her infant daughter in a stroller on the Upper East Side, police said.

Enter your email address to subscribe

Provide your email address to subscribe. For e.g. abc@xyz.com

You may unsubscribe at any time using the link in our newsletter.