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President’s Chief Economist Contradicts Administration’s Budget Unemployment Projections

May 12, 2009

Fact: The latest documents on the President’s Budget, released yesterday, assume an average unemployment rate of 8.1% in 2009, well below current CBO and Blue Chip forecasts.  

*click on the chart for a high resolution image
Fact: On Sunday, the President’s Economic Adviser, Dr. Christina Romer, said it is “pretty realistic” that the unemployment rate will reach 9.5% in 2009

Fact: If Dr. Romer is right and the unemployment gradually rises to 9.5% by the end of 2009 (which would be a dramatic slowing compared to recent monthly increases), the average unemployment rate for 2009 would be 9.0% — well above the Administration’s official current estimate of 8.1%.

Questions: If the President’s own economist does not believe the budget projections, what other Administration budget projections are wrong? And what does this mean about other estimates on which the budget is based?