(Wall Street Journal) The fiscal cliff would drive the U.S. economy back into recession next year and result in a jump in the jobless rate to 9.1% by the end of 2013, a new report from the Congressional Budget Office said.
Last August, President Obama and Congress put the U.S. economy on course to go over a "fiscal cliff." With the 2012 presidential election decided, WSJ's David Wessel tells you everything you need to know about the "cliff" but were afraid to ask.
The CBO said economic output would drop by 0.5 percentage point in 2013 if Congress fails to act to avert the tax increases and spending cuts put in motion by an earlier deficit agreement. But the CBO added the U.S. economy would in the longer run return to better growth rates and lower employment. The CBO, the independent budget arm of Congress, said the unemployment rates will fall to 5.5% by 2020.
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The agency has previously forecast that the U.S. economy could fall into recession next year if nothing is done to avert the fiscal cliff.