The Office of Management and Budget on Friday revised its inflation outlook for the fourth quarter upward to 4.8%, more than twice the 2% level forecast in May.
That increase brings the White House in line with the Federal Reserve forecast. Both see inflationary pressure easing rapidly next year, dropping to 2.5% by the fourth quarter of 2022 and 2.3% by 2023.
As part of its mid-session budget review, the administration also boosted its estimate of annual economic growth to 7.2% this year, up from 5% projected in May. And it estimated that the deficit for fiscal year 2021 will be $3.1 trillion, a reduction of $555 billion from the earlier estimate of nearly $3.7 trillion. The measure of the deficit as a share of the economy also fell, dropping to an estimated 13.9%, down from a previous forecast of 16.7%.
The White House still projects deficits topping $1 trillion a year for the next decade, but it now says that the cumulative total of those deficits will be $684 billion lower than it previously projected.