The White House is increasing its outlook for the U.S. economy. We will leave this up to you to decide whether or not it is a ploy.
Despite only a 1.5% GDP gain for the second quarter, the OMB’s mid-year review does warn of the risks in Europe and does note that the U.S. is operating well under capacity. The administration is now looking for roughly 8% unemployment to average about 8% in 2012 and 7.7% in 2013. This projection is also calling for unemployment to dip below 7% by 2015.
The White House’s official estimate is now that GDP growth will average 2.3% in 2012 and 2.7% in 2013, which is under the prior estimates made of 2.7% for 2012 and 3.0% in 2013.
While we noted this morning that the GDP release showed no news bring the recession to America, we cannot help but notice that major companies are still lowering guidance rather than raising guidance. If GDP was 1.5% for the second quarter (preliminary) and 2.0% in the first quarter, then the administration is somehow calling for GDP growth to pick back up closer and closer to 3% in the second half.
Another issue is that the White House now sees the deficit at $1.21 trillion for 2012, about $116 billion lower than prior targets. For 2013, the White House sees a deficit of $991 billion.
JON C. OGG