US economy set for solid growth, shrinking deficit: CBO
Washington: The United States is expected to post solid economic growth of more than 3.0 percent through 2016, accompanied by a shrinking deficit, a government agency said Wednesday.
The Congressional Budget Office, the nonpartisan analysis arm of Congress, said in its latest report that the federal government's tax and spending policies would not constrain economic growth as much as they had in 2013.
And state and local governments were expected to increase spending after several years of budget tightening, the CBO said.
In its economic and budget outlook report for 2014 to 2024, the CBO predicted growth in gross domestic product (GDP) at 3.1 percent this year and 3.4 percent in 2015 and 2016.
But growth would fall to 2.7 percent in 2017 and continue to slow "to a pace that is well below the average seen over the past several decades," largely because of slower growth in the labor force due to the aging population and mild inflation under 2.0 percent for the next several years.
Beyond 2017, CBO expects that economic growth will diminish to a pace that is well below the average seen over the past several decades.
The CBO predicted the unemployment rate would end this year at 6.7 percent, unchanged from December 2013, and decline only gradually, dropping below 6.0 percent in 2017.
It estimated that President Barack Obama's signature health-care reform, the Affordable Care Act, would cost the economy at least two million full-time jobs in the coming years.
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