Conditions in the labor market have improved notably in recent quarters, but a significant amount of slack in the economy remains. CBO projects that ongoing gains in employment over the next few years will largely eliminate that slack.
CBO anticipates that the economy will grow slowly this year and then at a faster but still moderate pace over the next few years, driven largely by stronger growth in business investment, consumer spending, and residential investment.
The deficit this year will be $506 billion, CBO estimates, about $170 billion lower than the deficit in 2013. After a weak first half of this year, CBO expects economic growth to pick up and the unemployment rate to continue to fall.
CBO issues one of its regular reports that provides estimates of the caps on discretionary budget authority for each fiscal year through 2021. By CBO’s estimate, appropriations for fiscal year 2014 have not exceeded those caps.