CBO: Policies for Increasing Economic Growth and Employment in 2010 and 2011

Policies for Increasing Economic Growth and Employment in 2010 and 2011 – January 2010

  • “After the most severe recession since the 1930s, the U.S. economy appears to be recovering. Real (inflation adjusted) gross domestic product (GDP) grew during the third quarter of 2009, after having fallen 3.7 percent since the recession began in the fourth quarter of 2007. However, the economy’s output is still about 7 percent below the Congressional Budget Office’s (CBO’s) estimate of potential GDP—the output the economy would produce if its resources were fully employed. From December 2007 to December 2009, the unemployment rate jumped from 4.9 percent to 10.0 percent, and payrolls fell by about 7.2 million jobs.1 Moreover, if employment had grown during this period at the same rate at which it had grown from 1990 to 2007, millions of additional jobs would have been added to the economy during that period; all told, the recession has lowered employment by about 11 million relative to what it would otherwise be. Nearly all professional forecasters believe that the economy has passed the through of the recession, but many also predict that the pace of the recovery will be slow.”
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