{"id":260935,"date":"2010-02-01T10:10:03","date_gmt":"2010-02-01T15:10:03","guid":{"rendered":"http:\/\/blogs.wsj.com\/economics\/2010\/02\/01\/budget-sees-slow-growth-accelerating-to-43-by-2012\/"},"modified":"2010-02-01T10:10:03","modified_gmt":"2010-02-01T15:10:03","slug":"2011-budget-sees-slow-growth-accelerating-to-4-3-by-2012","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/260935","title":{"rendered":"2011 Budget Sees Slow Growth, Accelerating to 4.3% by 2012"},"content":{"rendered":"

By Luca Di Leo and Henry J. Pulizzi<\/em><\/p>\n

After its severe recession, the U.S. economy is expected to expand by 2.7% in 2010, but that won’t be enough to prevent unemployment from staying high for several more years, the White House said Monday in its fiscal 2011 budget request.<\/p>\n

“Our nation is still experiencing the consequences of a deep and lasting recession, even as we have seen encouraging signs that the turmoil of the past two years is waning,” U.S. President Barack Obama<\/strong> said in his budget message.<\/p>\n

U.S. gross domestic product is seen growing by 3.8% in 2011 and by 4.3% in 2012.<\/p>\n

The forecasts are broadly in line with those made by private sector economists. The latest Wall Street Journal forecasting survey sees the economy growing by around 3% in 2010. The blue chip forecasts mentioned in the budget predict gross domestic product will rise by 2.8% this year and 3.1% in 2011.<\/p>\n

U.S. economic growth surged at the end of 2009, providing further evidence that the country is recovering from its worst recession since the Second World War. Gross domestic product rose by an annualized 5.7% rate October through December, the government’s first estimate of fourth-quarter GDP showed Friday.<\/p>\n

“Unfortunately, even with healthy economic growth there is likely to be an extended period of higher-than-normal unemployment lasting for several years,” the White House said.<\/p>\n

The unemployment rate is seen rising to 10% this year, compared with 9.3% in 2009. Despite the economy’s expansion, the jobless rate is expected to remain high for some time, falling to just 8.2% in 2012.<\/p>\n

Last month, the Congressional Budget Office<\/strong> forecast that the unemployment rate will average 10.1% through 2010 and 9.5% throughout 2011, levels that could dent Democrats’ hopes in this year’s mid-term elections and stymie Obama’s domestic agenda.<\/p>\n

Obama’s budget focuses heavily on tackling the U.S.’s high unemployment level. The president wants to give small businesses that hire new workers or raise wages a tax credit. He also has called for the U.S. to double exports over the next five years, an effort he said would support 2 million jobs.<\/p>\n

Friday will see the release of the January employment report. Economists surveyed by Dow Jones Newswires forecast the unemployment rate is expected to have edged up to 10.1% from 10.0% in December. The jobless rate typically lags the economy as discouraged workers who had given up looking for work re-enter the labor pool.<\/p>\n

The White House noted in its budget that there is usually a lag of one to two quarters before unemployment declines after the resumption of real GDP growth.<\/p>\n

“The increase in unemployment has had devastating effects on American families, and the recovery will not be real for most Americans until the job market also turns around,” the White House said.<\/p>\n

The Federal Reserve<\/strong> last week gave a slightly more upbeat reading of the U.S. economy’s outlook, but left short-term interest rates near zero to help support what it considers a soft recovery. The U.S. central bank repeated a vow that the federal funds rate would stay at a record low for several months at least in the face of high unemployment and low inflation.<\/p>\n

The budget sees the consumer price index rising to 1.9% this year after it fell by 0.3% in 2009. However, inflation is expected to moderate slightly in 2011, with CPI rising by 1.5%. Private sector economists see the consumer price index at +2.1% this year and +2% in 2011.<\/p>\n

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By Luca Di Leo and Henry J. Pulizzi After its severe recession, the U.S. economy is expected to expand by 2.7% in 2010, but that won’t be enough to prevent unemployment from staying high for several more years, the White House said Monday in its fiscal 2011 budget request. “Our nation is still experiencing the […]<\/p>\n","protected":false},"author":850,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-260935","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/260935","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/850"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=260935"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/260935\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=260935"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=260935"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=260935"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}