The coronavirus crisis will scar the U.S. economy for years to come, according to the updated 10-year outlook from the Congressional Budget Office, released Thursday.
“The economic outlook for 2020 to 2030 has deteriorated significantly since the agency last published its full baseline economic projections in January,” the report says. Here some details from the projections, which assume no further stimulus programs from the federal government:
- The unemployment rate will stay above pre-Covid levels through 2030.
- The average unemployment rate for the 2030 to 2030 period is estimated to be 6.2%, up from 4.2% in the pre-Covid estimates.
- At the end of 2020, the unemployment rate is projected to be 10.5%. It is projected to fall to 7.6% by the end of 2021, and 6.9% by the end of 2022.
- GDP growth will remain below its potential for years, with the output gap totaling more than $17 trillion by 2030 relative to the pre-Covid trend.
It’s not all bad news, though. The CBO projects rapid economic growth in the third quarter, and a 12.4% annualized growth rate in the second half of 2020. Unemployment is projected to peak this summer at 14%, before falling “quickly” at the end of 2020 and through 2021. And interest rates will remain low, making it easier to finance the trillions in relief spending that, according to the CBO, has helped prevent the economy from deteriorating further and boosted the recovery.