"So over a five-year period, the typical recession since World War II has been followed by a growth rate of a little less than 4.2 per cent over five years. Our forecast is about 3.8 per cent over five years," President's Council of Economic Advisers Chairman Austan Goolsbee said.
"So its slower than the typical recovery and we assume that because it's harder to get out of a financial recession," he told reporters as the White House unveiled its Annual Budget.
Goolsbee said the real GDP growth on a year-over-year basis, the administration is forecasting 2.7 per cent in 2011, 3.6 per cent in 2012, 4.4 per cent in 2013. "So our growth rate for 2011 is a fair bit lower than the consensus of private forecasters surveyed by the blue chip or by Survey of Professional Forecasters," he added.
"In the longer run we anticipate catching back up, that the potential GDP of the United States has not been severely damaged by this recession. So our medium-run forecast is a bit faster. It's within the so-called central tendency that comes out of the Fed FOMC forecast of last November, which is a -- the reasonable range in which they drop off the highest and lowest. It is rather in the center of that central tendency,” he said.
In 2012, the unemployment rate is projected to be 8.2 per cent as against 9.1 per cent in 2011. It currently stands at 9.0 per cent.
"Unemployment is likely to fluctuate through the year, but any revisions that we have will come out at the mid- session review," he added.