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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.
(Reporting by Ann Saphir; Editing by Andrea Ricci)
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