Obama 2012 Budget Projects Unemployment Rate To Be Higher, Growth To Be Slower Than Expected

NEW YORK -- The Obama administration reversed course Monday in its proposed budget for fiscal 2012, forecasting slower growth and higher unemployment for the next two years in an implicit acknowledgment that the economy continues to suffer.

In prior budgets, the administration had projected robust growth and a lower unemployment rate for 2011 and 2012, giving the nation the impression of a rosy economic expansion and coloring its forecasts for tax revenue and government spending.

But in its latest spending plan, the White House revised those forecasts.

The administration now projects a growth rate of 2.7 percent this year, more than a full percentage point lower than its estimate in last year's budget, when it predicted 3.8 percent growth. For 2012, the administration forecasts 3.6 percent growth, considerably lower than its previous estimate of 4.3 percent.

The unemployment rate reflects the grim projections.

This year, the White House estimates that 9.3 percent of workers will be jobless. Last summer, in its midyear budget update, the administration forecast a 9.0 percent unemployment rate. Next year, when President Barack Obama runs for reelection, the administration forecasts an 8.6 percent unemployment rate, a half-percentage point increase from last summer's projection of 8.1 percent. The White House also raised its projection for the unemployment rate in 2013.

The unemployment rate has never averaged above 8 percent during a presidential election year, according to Labor Department data stretching back to 1948.

Further breakdown of the budget proposal here.

Comments

[kengault]

02:55 PM on 03/01/2011

I think Obama is going to hire a lot of government workers and then raise taxes on the rich to pay their wages. Everyone will be happy then!

[Jim deim]

10:52 AM on 02/23/2011

So basically to the millions of unemployed growing monthly who are past 99 weeks the Congress and President says tough. I bet if the media actually talked about the facts that change. Facts like we lost over 10 million jobs since 08 and that means over 10 million short to keep those millions from going past 99 weeks. Not because they got checks or our lazy. That it will still take years to stop the growth in long term unemployed. That it will be years before more jobs created each month then people we add to unemployment. Or the big one how many will die due too being cut off? Since the fact is more people die from poverty every month then 9/11, or shooting in AZ, or killed by pirates why is it that never makes the lead story? Not sensational enough my guess. Yet that doesn't change the fact what kills more people. That as 99ers get cut off we put them into becoming homeless/poverty risk that kills more Americans then risk from terrorists or nuts shooting 14 people ever will. Which in turn based on common sense means 1000s of those millions of 99ers will die. We spent 1 trillion to stop terrorists doing another 9/11. Yet we are willing to let 1000s of 99ers and people die in poverty because we don't have money to save them. The reason we spend our money where it saves the least lives not the most fact.

[Thomas Kuzdal]

09:43 PM on 02/15/2011

There is no compelling reason to expect/hope/believe that the unemployment data will improve anytime soon. Maybe we'll be better off when the boomers start dying off somewhat earlier than they had planned. Maybe we'll be better off if illegals choose not to come here (because the opportunities are fewer). Maybe we will be a better country when people find the passion and conviction to fight for the opportunities that should be here.

Until then, there are no heroes...there are no leaders. Just a lotta noise from the hucksters.

[gokulram arunasalam]

02:57 PM on 02/15/2011

That means, interest rates remain low for longer than most think and hence heightened commodities driven inflation.

[netman714]

12:50 PM on 02/15/2011

With control of the Senate and the Republicans trying to wreak havoc on our country, NOW IS THE TIME, Mr. President to lead the way to change we can believe in.
Supply side economics has been demonstrated to hurt the economy, your own economists are telling you the only way out of this economic crisis is to increase government spending and our infrastructure and schools need more money to help us grow.
Lead the charge and tell the Republicans "I am in charge and this is how we will move forward." Stop letting them push you around.

[oilfield]

12:10 AM on 02/16/2011

double down......11% unemployment

[kemcha]

11:13 AM on 02/15/2011

Mr. President, when are you going to learn? Those of us who are unemployed have known for a very long time that the White House has been fudging the actual unemployment rate ... why is it that your own administration is still deluding itself that the problem will go away if you continue to ignore it.

Problem is that the unemployment problem is simply not going away, it's getting bigger. Youo need to pass comprehensive unemployment benefits for everyone who is unemployed and then worry about creating jobs. So far, nobody is creating enough jobs to offset the jobs that are being eliminated. 450,000 new jobless claims every week = number of jobs lost. January only yielded 300,000 new jobs. Do the math ...

Path unemployment benefits for the 99ers.

[oilfield]

12:11 AM on 02/16/2011

didnt you hear unemployment is now 9%....its truly amazing.

[NoiseOfKnowing]

09:28 AM on 02/15/2011

Well Mr. President, you should have listened to Paul Krugman. He's been right all along.

[trobts]

08:56 AM on 02/15/2011

Whenever the government gives HUGE concessions (tax cuts) to the rich, with no consequences or payback for these concessions, the outcome will NEVER turn out well -- they want more and more and produce less and less on the backs of the have nots.. I think the only solution is to EGYPT these politicians/government ... THEY NEED TO WAKE UP!

[wikwox]

08:47 AM on 02/15/2011

I just got a job, low wages but some benefits. At age 55 I feel very lucky, there is no love for the unemployed out there. There is no real reason for the economy to expand, especially when you consider that for 8 years the housing bubble was an illusion. Jobs continue to leave the country as greedy corporations feel no loyalty or love for the American people. We continue to allow over one hundred thousand immigrants to enter the country legaly, more than the rest of the world combined. As a country we seem to hate ourselves.

[acoventrypatriot]

09:01 AM on 02/15/2011

Congratulations, Old Timer (just kidding; I'm older than you)!! There's only one constant: what's in it for "ME". And since the wealthy can take exceptional care of the lobbyists/politicians, they get tremendous value for their influence dollar.

Nothing says this had to go on forever. And it won't.

[Fred Ricardo]

08:35 AM on 02/15/2011

Yep! I remember sitting in Social Studies class and being taught this lesson about FDR. There is no trickle down economics from public wealth.

[ken607]

07:21 AM on 02/15/2011

well when you have the BIGGEST f@ckup as a president and deregulate, start 2 illegal wars, have a prescription plan thats NOT paid for, and throw sand in the gears of this once great nation. you get what we see now. STAGNATION! why else hasnt BOEHNER brought a jobs bill to the floor? they just want power! ive said it before and say it again. DEMOCRATS LIKE TO GOVERN, REPUBLICANS LIKE TO RULE. and theres a big difference!

[JohnCK]

06:34 AM on 02/15/2011

The unemployment rate has never averaged above 8 percent during a presidential election year, according to Labor Department data stretching back to 1948.

[Peter Combs]

08:33 AM on 02/15/2011

which tanslates into a loss for Obama in 2012....it was around 7.6 when he came into office.

[thrashertm]

06:24 AM on 02/15/2011

The government's unemployment numbers are a complete farce anyway. We all know that the true rate is actually closer to 20%.

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[DrObvious]

02:13 AM on 02/15/2011

with Republicans intent on contracting public spending,  they seem determined to repeat their  mistakes coming out of the Great Depression,  pressuring the president into public cuts .... causing recession again ...  
 
recovering from depression should be a one-trial-learning sort.     except for Republicans, who conserve misunderstanding before anything else

[luminavi]

02:27 AM on 02/15/2011

We cannot spend our way out of this. The Great Depression didn't have this thing called GLOBALIZATION, as manifested by offshore outsourcing.

We could spend $5 trillion more, but eventually it's still going to run out, with no real fix, because even more jobs would have been destroyed here and sent overseas, and consumer demand is going to be worse off than it was before. Already we're looking at the one of the smallest tax revenue bases in history.

Globalization is bending the old rules of macroeconomics. We need to recognize this and make the adjustments accordingly.

[youngblood360]

07:15 AM on 02/15/2011

You are correct; however we are still dealing with a fragile economy. If the Republican draconian cuts are enacted we will be plunged into another crisis. We did it the GOP way for 8 very long years. It's time to do it the Democratic way so that we can put to rest the Republican fallacy once and for all - i.e. tax cuts we can't pay for.

[dkinton49]

01:49 AM on 02/15/2011

I am trying to figure out who our government thinks they are fooling with the unemployment rate. It is about 16 - 20%, perhaps higher. I am sure that no matter what, the rate will be 7% by election time. All Obama, the smartest man in the world, has to do is change the way it is calculated and people will say, "I am not sure how he did it, but okay I believe it!"

[DrObvious]

02:27 AM on 02/15/2011

the Department of Labor has some responsibility for tracking unemployment,  and they don't game the numbers for political purposes of any political parties.   the "official" unemployment rate does understate the employment problem, with some unemployed not counted because they quit looking for work, and with large numbers under-employed relatigve to their skills and availability

[Richard Bartholomew]

04:42 AM on 02/15/2011

Statistics are the trash-talk of politics.