CBO Warns of Recession

Before you go, we thought you'd like these...
Before you go close icon

Warnings about the negatives effects of the fiscal cliff continued one day after the election, and comments from both Republicans and Democrats which indicated each was open to budget and tax negotiations. The Congressional Budget Office warned that matters remain as they are, the U.S. could tip into recession, and unemployment could move to 9.1%

In its "Economic Effects of Policies Contributing to Fiscal Tightening in 2013″, the CBO warned:

Substantial changes to tax and spending policies are scheduled to take effect in January 2013, significantly reducing the federal budget deficit. According to CBO's projections, if all of that fiscal tightening occurs, real (inflation-adjusted) gross domestic product (GDP) will drop by 0.5 percent in 2013 (as measured by the change from the fourth quarter of 2012 to the fourth quarter of 2013)—reflecting a decline in the first half of the year and renewed growth at a modest pace later in the year. That contraction of the economy will cause employment to decline and the unemployment rate to rise to 9.1 percent in the fourth quarter of 2013.

The parties to the negotiations can't say they were not advised.

Douglas A. McIntyre


Filed under: 24/7 Wall St. Wire, Politics Tagged: "Economic Effects of Policies Contributing to Fiscal Tightening in 2013", CBO, Congressional Budget Office, featured, GDP drop by 0.5 percent in 2013, unemployment 9.1%
Read Full Story

Markets

S&P 500 2,374.15 25.46 1.08%
DJIA 20,763.89 216.13 1.05%
NASDAQ 5,983.82 73.30 1.24%
DAX 12,454.98 406.41 3.37%
NIKKEI 225 19,033.35 157.47 0.83%
HANG SENG 24,379.95 240.47 1.00%
USD (per EUR) 1.09 0.00 0.02%
USD (per CHF) 1.00 0.00 -0.03%
JPY (per USD) 110.06 0.43 0.39%
GBP (per USD) 1.28 0.00 0.15%

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners

Cops Catch Up To A Suspicious Speeding Vehicle - And Make An Appalling Discovery Inside Cops Catch Up To A Suspicious Speeding Vehicle - And Make An Appalling Discovery Inside
If You Find One Of These In Your Yard, Don't Touch It - And Try Not To Panic If You Find One Of These In Your Yard, Don't Touch It - And Try Not To Panic
Don't Get Too Close To a Newborn Giraffe Unless You Want to Get Kicked in the Nuts Don't Get Too Close To a Newborn Giraffe Unless You Want to Get Kicked in the Nuts