White House forecasts stubbornly high unemployment

White House economists on Friday predicted that unemployment will fall only slightly by the end of the year, amid modest economic growth and a dangerously high budget deficit.

The Office of Management and Budget showed little in the way of optimism about the state of the world's largest economy, forecasting unemployment of 7.9 percent by year-end, compared with 8.2 percent today.

The White House unit also predicted that 2012 growth would come in around 2.6 percent, not fast enough to bring down painfully high levels of joblessness, which remain the biggest obstacle to a solid recovery and President Barack Obama's chances of re-election in November.

The 2012 budget deficit is expected to reach $1.21 trillion, around $116 billion less than first expected, but still astronomically high, at 7.8 percent of gross domestic product.

Amid rolling crises spilling over from Europe and twitchy consumers and investors at home, the US economy has struggled for four years to recover from the "Great Recession."

Earlier estimates had expected growth of around 2.7 percent this year, with unemployment of 8.9 percent.

Obama's allies in Congress seized on the latest figures as evidence of the need for Republicans to accept the president's plans to juice the economy.

"There is much more work to be done to bolster our recovery," said Congressman Chris Van Hollen. "It is more important than ever to pass the president's jobs package, which has been sitting before the House of Representatives since September."

Republican oppose the plan because it would raise taxes on those earning over $200,000 a year.

Source: http://news.yahoo.com/us-economy-grew-1-5-second-quarter-131847739.html

cnn yahoo news weather radar foxnews Colorado shootings dark knight rises Aurora shooting