Economy

In CBO’s latest projections, economic growth slows and then picks up over the 2023–2025 period. That initial slowdown in economic growth drives up unemployment. Inflation continues to gradually decline.

CBO assesses its two-year and five-year economic forecasts and compares them with forecasts of the Administration and the Blue Chip consensus, an average of about 50 private-sector forecasts.

The U.S. faces a challenging fiscal outlook in the coming years, according to CBO's projections. Measured as a percentage of GDP, large and sustained deficits lead to high and rising federal debt that exceeds any previously recorded level.

Over recent decades, corporate economic profits have grown faster than the amounts that corporations pay in federal taxes. CBO examined the factors that explain why corporate tax payments have not grown with corporate economic profits.

To show how variations in economic conditions might affect its budget projections, CBO analyzed how revenues, outlays, and deficits might change if the values of key economic variables differed from those in the agency’s forecast.

CBO summarizes in graphic form its projections of what the economy would look like this year and over the next decade if current laws governing federal taxes and spending generally remained in place.

In CBO’s projections, the federal deficit totals $1.4 trillion in 2023 and averages $2.0 trillion per year from 2024 to 2033. Real GDP growth comes to a halt in 2023 and then rebounds, averaging 2.4 percent from 2024 to 2027.

CBO describes its current view of the economy over the next two years, compares that view with projections of other forecasters and with those that CBO made previously, and explains the implications for the federal budget.

CBO projects the budgetary effects of automatic stabilizers—as well as the size of deficits without them—from 2022 to 2032 and provides historical estimates of the stabilizers’ effects since 1972.

CBO examines how inflation has affected households at different income levels and compares inflation since 2019 with the growth in household income over the same period.

This paper presents a practical method for assessing the uncertainty of long-term economic projections.

CBO developed a Markov-switching model to help incorporate asymmetric dynamics into macroeconomic projections and cost estimates that require simulations of the national unemployment rate.

CBO assesses its two-year and five-year economic forecasts and compares them with forecasts of the Administration and the Blue Chip consensus, an average of about 50 private-sector forecasts.

CBO projects that the economic expansion that began in mid-2020 will continue. Real GDP is projected to return to its prepandemic level in mid-2021. The number of people employed is projected to return to its prepandemic level in 2024.

By providing financial support to households, businesses, and state and local governments, federal laws enacted in response to the 2020 coronavirus pandemic will offset part of the deterioration in economic conditions brought about by the pandemic.