The White House Office of Management and Budget released its latest budget projections today, which show that the current trajectory of the economy is still exceedingly weak. According to the alternative economic scenario, which includes the most updated economic assumptions, GDP growth will be just 1.7 percent this year and 2.6 percent next year. The alternative economic scenario also doesn’t project unemployment falling below 6 percent until 2017:
As the Huffington Post’s Sam Stein noted, the report does show that corporate America, unlike Main Street, is doing quite well:
In 2009, domestic corporate profits were $906 billion. By 2011, that number had risen to $1.322 trillion — an increase of roughly 46 percent. During that same time period, employee compensation went from $7.812 trillion to $8.264 trillion — an increase of just 5.7 percent.
According to researchers at Northeastern University, 88 percent of the real national income growth since 2009 have gone to corporate profits, while just one percent has gone to wages and salaries.
The OMB’s alternative scenario is slightly less optimistic than that coming from the Congressional Budget office. According to the CBO’s models, “as the growth of output picks up after 2013 in CBO’s forecast, the unemployment rate falls to 5.3 percent by the second half of 2016.” Still, CBO projects that unemployment will be 8.7 percent at the end of 2013.
Next week, President Obama is laying out a jobs plan, which will reportedly include an extension of the payroll tax cut enacted last year and a national infrastructure bank, but an intransigent House Republican majority has already said they will oppose some facets of the plan.