© Reuters. FILE PHOTO: A person shops in a supermarket in Manhattan, New York City, U.S., June 10, 2022. REUTERS/Andrew Kelly/File Photo
(Reuters) – The Congressional Budget Office projects U.S. economic growth to slow to 1.5% in 2024, with the unemployment rate seen rising to 4.4% next year from what it estimates will be a 3.9% average this quarter.
The updated projections from the nonpartisan budget referee agency on Friday also included a substantial upward revision to expected GDP growth this year to 2.5%, from 0.9% seen in July.
CBO said the growth slowdown expected for next year, and a reduction in its previous projection for 2025 growth to 2.2% from 2.4% seen in July, was due to slower-than-projected growth in consumer spending, investment and exports.
Higher expected immigration, it said, mitigated what would have been a bigger downward reduction in those contributors to growth. Projected immigration will also help boost the labor force, it said.
The CBO now projects the personal consumption expenditures price index – the measure the Federal Reserve targets at 2% – to fall to 2.1% next year, from an estimated 2.9% this year, due to improvements in supply.
In July it had estimated 2024 inflation by that measure at 2.6%. Core PCE, which excludes food and energy, was projected at 2.4% next year, down from 3.4% in 2023.
The CBO report did not update federal budget forecast data.
