The Congressional Budget Office said Friday it expects inflation to nearly hit the Federal Reserve's 2% target rate in 2024, as overall growth is expected to slow and unemployment is expected to rise into 2025, according to updated economic projections for the next two years.
The office's Current View of the Economy from 2023 to 2025 report estimates that the unemployment rate will hit 4.4% in the fourth quarter of 2024 and remain close to that level through 2025.
Meanwhile, gross domestic product, otherwise known as the overall health of the economy, is estimated to fall from 2.5% in 2023 to 1.5% in 2024 — then rebound to 2.2% in 2025, according to the CBO projections.
Compared with its February 2023 projections, CBO’s Friday report predicts weaker growth, lower unemployment, and higher interest rates in 2024 and 2025.
But in a reminder that the U.S. economy has seldom behaved as anticipated through the pandemic and its aftermath, the employment forecast looks very different from the pace of hiring so far this year.
The jobless rate has now remained below 4% for nearly two years, the longest such streak since the late 1960s.
And on the inflation front, most economists expect growth to slow and inflation to continue to decline.
This week, the Federal Reserve kept its key interest rate unchanged for a third straight time, and its officials signaled that they are edging closer to cutting rates as early as next summer.
At a news conference, Federal Reserve Chair Jerome Powell said that officials are likely done raising rates because of how steadily inflation has cooled.
In keeping with the agency’s mandate to provide objective, impartial analysis, the report makes no policy recommendations, CBO director Phillip Swagel said in the report.
Associated Press reporter Chris Rugaber contributed to this report.
A new poll finds U.S. adults are more likely than they were a year ago to think immigrants in the country legally benefit the economy. That comes as President Donald Trump's administration imposes new restrictions targeting legal pathways into the country. The Associated Press-NORC Center for Public Affairs Research survey finds Americans are more likely than they were in March 2024 to say it’s a “major benefit” that people who come to the U.S. legally contribute to the economy and help American companies get the expertise of skilled workers. At the same time, perceptions of illegal immigration haven’t shifted meaningfully. Americans still see fewer benefits from people who come to the U.S. illegally.
Shares of Tylenol maker Kenvue are bouncing back sharply before the opening bell a day after President Donald Trump promoted unproven and in some cases discredited ties between Tylenol, vaccines and autism. Trump told pregnant women not to use the painkiller around a dozen times during the White House news conference Monday. The drugmaker tumbled 7.5%. Shares have regained most of those losses early Tuesday in premarket trading.
Scott Trench, host of the BiggerPockets Money Podcast, explores how recent rate cuts, high borrowing costs, and mortgage rates are reshaping U.S. real estate.
A look into how disruption, AI, and global economic trends are transforming the modern supply chain with Jeremy Jansen, Head of Supply Chain at Wells Fargo.
Delta CSO Amelia DeLuca reveals at the Fast Co. Innovation Festival how tech, sustainable aviation fuel, and smart operations are revolutionizing air travel.
Chipmaker Nvidia will invest $100 billion in OpenAI as part of a partnership that will add at least 10 gigawatts of Nvidia AI data centers to ramp up the computing power for the owner of the artificial intelligence chatbot ChatGPT.
