WASHINGTON (AP) — President Barack Obama's $3.9 trillion budget proposal for next year suggests the U.S. economic recovery that began in 2009 will continue to gain momentum over the next few years but that the unemployment rate won't fall to pre-recession levels of below 6 percent until 2017.
The White House forecast that the budget deficit would fall from $649 billion in the fiscal year that ends Sept. 30 to $564 billion in fiscal 2015 and $458 billion in 2017. If the projections hold up, it would mark three years in a row of annual red ink below
The unemployment rate, which was 6.6 per cent in January, will continue to slowly decline over the next five years, stabilizing at 5.4 percent by 2018, the administration projected. That's down from a high of 10 percent reached during the 2008-2009 recession.
The economic forecasts, included in the president's budget proposal for the fiscal year that begins Oct. 1, are generally in line with projections made by other government and private forecasters.
However, the White House projects a 6.7 percent unemployment rate for 2015. While that's the same level as in the Blue Chip Consensus — an average of about 50 private-sector forecasts— it is more optimistic than the Congressional Budget Office, which projects 2015 unemployment at 7.1 percent.
The administration forecast is based on assumed congressional approval of all of Obama's budget tax and spending proposals, an unlikely prospect.