Press Release - President Biden's Economic Plan is Working: Economy is Booming, Growth Projections Are Revised Up and Deficit Projections Are Revised Down
A new report from the CBO confirms that the President's economic plan is working: CBO agrees with the OECD, World Bank, and independent forecasters that the US economy will have strong growth, unemployment will continue to decrease, and inflation is transitory.
In February, CBO projected 2021 economic growth of 3.7%. Today, they doubled that number up 7.4%.
The last time the economy grew at this rate was when Ronald Reagan told us it was "Morning in America" in 1984.
CBO cites three factors for the upward revision:
- Fiscal policy like the American Rescue Plan boosting growth
- More rapid reductions in social distancing than expected as a result of our progress in defeating the virus
- Savings households accumulated during the pandemic flowing through to the economy.
President Biden's economic and COVID plans are generating strong economic growth – the American people are returning to normal life and the economy is booming.
In February, CBO projected 2021 unemployment of 5.7%. Today, they revised that number down to 5.5%. Critically, CBO expects the unemployment rate to reach 4.6 percent by the end of the year and to essentially return to its pre-pandemic level by the end of 2022.
In February, and before passage of the American Rescue Plan, CBO projected a 2022-2031 deficit of 4.4% of GDP. Today, they revised down that deficit as a share of GDP. President Biden's investments in our economy through the ARP aren't only growing the economy, they are also reducing budget deficits as a share of the economy.
And, let's be clear: the Trump administration enacted $8 trillion of deficit increases. His tax giveaway to the wealthy and corporations alone added almost $2 trillion to the deficit.
CBO also projects core PCE inflation to be 2% in 2022 – adding its voice to the chorus that we are living through transitory inflation, as the economy gets back on track.
Lastly, CBO is projecting real wage growth this year, in addition to in 2022 and 2023.
All of this demonstrates what we've been saying all along: President Biden's economic plan is working.
Joseph R. Biden, Press Release - President Biden's Economic Plan is Working: Economy is Booming, Growth Projections Are Revised Up and Deficit Projections Are Revised Down Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/350680