The CBO year-by-year analysis of Obama’s budget includes projections for unemployment. For perspective, according to their numbers, unemployment averaged 5.8 percent last year, generally considered to be a rough year. (The highest it reached in the Bush era was 6 percent, in 2003.)
They have a grim outlook, well beyond this year:
For the next two years, CBO anticipates that economic output will average about 7 percent below its potential — the output that would be produced if the economy’s resources were fully employed. That shortfall is comparable with the one that occurred during the recession of 1981 and 1982 and will persist for significantly longer — making the current recession the most severe since World War II. In CBO’s forecast, the unemployment rate peaks at 9.4 percent in late 2009 and early 2010 and remains above 7.0 percent through the end of 2011.
On an annual basis, for 2009, they project the average unemployment rate for the year to be 8.8 percent; it actually peaks in 2010 at 9.0 percent; it slowly recedes to 7.7 percent in 2011, and 6.6 percent in 2012. Only in the first year of an Obama second term would it get back to the range of the worst of the Bush years, 5.6 percent. They project from 5.1 to 4.8 percent for the duration of their projection out to 2019.
Now, obviously, it’s a projection and could end up way off; like the Vegas lines on sporting events, there’s a reason we play the games. But if the CBO is right, incumbents ought to be nervous for the 2009 gubernatorial races, the 2010 midterms, and maybe all the way to 2012.