Sluggish growth and stubbornly high unemployment will continue to plague the economy next year, according to a Office of Management and Budget analysis that offered a potentially grim portent of President Barack Obama's re-election chances.
Unemployment will remain mired at 9 percent, with overall growth this year likely to register at a timid 1.7 percent, the OMB report predicted. The 1.7 percent figure is a full percentage point smaller than what the Obama administration had projcted.
The deficit is also expected to mount to $1.3 trillion for the budget year ending on Sept. 30, a slight increase from last year's number that is still more than than $300 billion less than what the White House predicted in February.
Obama will unveil a highly anticipated jobs initiative on Sept. 8 before a joint session of Congress. He had planned to deliver the jobs speech on Sept. 7 but moved the date amidst opposition from Republicans, who claimed the president was trying to upstage a Republican presidential debate scheduled for the same time.
The president will come forward with a specific proposal that by any objective measure would add to growth and job creation in the short term, White House Press Secretary Jay Carney said in predicting Obama's initiative would spur better growth than what the OMB report envisioned.
The report also predicted a slow but steady increase in the economy's growth rate to 3.9 percent in 2014.
We are not forecasting a double-dip recession, said Obama economic adviser Katharine Abraham.