The last time we had a serious recession(s), 1980-82, the economy quickly rebounded to the blue line. Same story for the periods immediately after mild recessions of '90-91 and 2001.
This time IS different. And, according to the CBO, don't expect a return to normalcy soon;
CBO’s GDP projection has three significant features:
- CBO projects that real GDP will continue to grow only as fast as potential GDP this year;
- They then project that growth will accelerate; but
Attaching numbers to this, CBO projects real GDP will grow 1.4 percent in 2013, 3.4 percent in 2014, and 3.6 percent per year from 2015-2017, reaching potential GDP at the end of 2017.
- They project that the output gap won’t close until the end of 2017, almost five years from now.
This translates into their (un)employment projections as well. CBO projects an 8.0% unemployment rate in the fourth quarter of this year and a 7.6% rate at the end of 2014, only three-tenths of a percentage point below where we are now. They then project that the unemployment rate will decline to reach full employment by the end of 2017.Be careful what you vote for!
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