Slower jobs recovery ahead: White House
Sobered by developments like the debt crisis in Europe and continued troubles in housing at home, the White House has grown less optimistic about economic growth and jobs.
The White House budget office forecast Thursday that the unemployment rate won’t fall below 6 percent until 2017 — two years later than it predicted in February, when President Obama delivered his 2012 budget proposal to Congress.
The Office of Management and Budget also lowered its estimates for annual GDP growth by roughly a percentage point for this year, next year and 2013. Its forecasts for 2015 and 2016 are somewhat higher than they were.
OMB said in its “mid-session review” that it now expects the economy to grow at a 1.7 percent rate this year, down from its 2.7 percent forecast in February. Growth is expected to be 2.6 percent next year and 3.5 percent in 2013.
Despite the downward revisions, “we are not forecasting a double-dip recession,” Katharine Abraham, a member of the White House Council of Economic Advisers was cited as saying by CNN.
In terms of unemployment, OMB said that it still expects the jobless rate — currently 9.1 percent — to gradually come down.
But the pace of decline is now expected to be more gradual. For 2011, it forecast the rate will stay at 9.1 percent. At the same time, its forecast for unemployment this year is actually lower than predicted in February.
The Office of Management and Budget’s mid-session review comes a week before President Barack Obama is scheduled to deliver a series of proposals to boost employment and reduce deficits to a joint session of Congress.
