U.S. CBO published its Budget and Economic Outlook: 2018 to 2028
U.S. CBO published its Budget and Economic Outlook: 2018 to 2028, and it's quite optimistic the near term economy, while showing the budget deficit hitting $1 B in 2020. The CBO is forecasting an $804 B budget shortfall for this fiscal year; last June it had estimated the red ink at $563 B. The new estimates project 2018 GDP growth at 3.3% (4Q y/y), one of the strongest on the Street, thanks in large part to the tax and spending stimulus. Indeed, the forecast was only 2% last June. But, growth slows quickly after that to 2.4% in 2019, 1.8% in 2020, and then 1.7% from 2023 through 2028. And the budget gap is expected to be persistently large over the decade. These forces would see the deficit rise to nearly 100% of GDP. The unemployment rate is expected to fall to 3.8% this year, while payroll gains average 211k. The core PCE price index is projected at 1.9% this year and 2.1% in 2019.