U.S. Budget Gap Narrows to Smallest Since 2007, CBO Says – Bloomberg 08-27-14

Salient to Investors:

The CBO predicts:

  • A declining jobless rate will raise tax revenues and shrink the US budget deficit to $469 billion in 2015, $506 billion in the 12 months ending September 30 – versus predictions of $492 billion in April and $680 billion in 2013, and a record $1.4 trillion deficit in 2009.
  • The budget deficit will start rising again in 2018 as the gap between spending and revenues grows relative to the size of economy, and federal debt climbs.
  • The budget deficit will be 2.9% of GDP in 2014 and 2.6% in 2015 – versus 1.1% in 2007.
  • The US economy will grow 1.5% in Q4 2014 versus 3.1% predicted in February.
  • Unemployment will average 6.2% in 2014, 5.9% in 2015, and slack in the labor market will largely disappear by the end of 2017.
  • The 3-month T-bill will remain near zero until half2 2015, and increase to an average of 2.1% in 2017.
  • Monetary policy will continue to support economic growth during the next few years because of slack in the labor market and inflation below the Fed’s goal.

Read the full article at http://www.bloomberg.com/news/2014-08-27/cbo-sees-wider-u-s-deficit-as-slower-growth-cuts-revenue.html

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