CBO Sees Wider U.S. Deficit on Slower Growth

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Aug. 27 (Bloomberg) -- The budget deficit in the U.S. this year will be wider than predicted four months ago as weaker-than-expected economic growth in the first half hurt tax revenue, the Congressional Budget Office said. Peter Cook reports on “Market Makers.” (Source: Bloomberg)

Breaking news out of washington.

New deficit numbers coming up in the congressional budget office.

Analysts say the gap will be higher than they thought a few months ago but it is still going to be the smallest deficit since 2008. peter cook is in washington with more.

Put it into perspective for us.

The deficit for this year according to the congressional budget office, $506 billion, up from the $492 billion estimate back in april thanks largely to weaker than expected economic growth which has hurt tax receipts.

It is projected, the deficit, to drop lower in 2015, below the 500 million mark.

The projection for this year compared to lester's deficit of $680 billion.

It is dropping.

Substantially.

The projection for 2015, dropping to $469 billion.

That would be the sixth straight year of falling deficit.

The lowest number since 2008. the cbo warning the number is going to start to rise again starting in 2016 and eventually hit $1 trillion thanks to the rising health care costs, aging population, so the short-term picture is good, longer-term picture is still challenging.

The short-term picture, a few more number set are important.

Projected deficit this year would be 2.9% of gdp, next you're would be 2.6% of gdp.

Expecting unemployment will average out to 6.2% this year.

The 40 year average for gdp is 3.1%. that puts it in perspective.

Unemployment for next year projected to be below 6%. we are seeing the economy having an impact on the deficit, the slowdown in the first quarter translating into some text or seas.

The short-term picture is good, longer-term is still challenging.

I think that is the bottom line for washington, for the white house, and congressional democrats, maybe a good thing these numbers are coming out, something they might be able to campaign on.

Thank you so much, peter cook.

It is a good thing to see the deficit shrinking, unless you are one of the people who want congress to tackle entitlement or tax reform.

For lawmakers, the pressure is off.

This text has been automatically generated. It may not be 100% accurate.

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