U.S. Deficit Soars, Unemployment Rate Falls to Record Low

Fiscal year 2018 has marked a significantly higher federal deficit, which hit $782 billion, the Congressional Budget Office said.

That figure amounts to 3.9 percent of gross domestic product (GDP), up from 2.4 percent the year before and may have been even higher if not for certain payments, The Hill writes. The federal deficit, which soared a staggering 17 percent, would have most likely reached $826 billion, or 4.1 percent of GDP without the shifted payments. That would have represented a 24 percent rise in fiscal year 2018.

However, the Trump administration has dismissed concerns about the deficit, with White House economic advisor Larry Kudlow saying that economic growth would eventually bring down the nation’s debt level. Most economists seem to disagree with such assertions, while according to the CBO’s projections the deficit will near $1 trillion in fiscal year 2019, which began on October 1.

Meanwhile, the unemployment rate in the U.S. fell to a 49-year record low in September, despite a slowing down in job creation, the government said on Friday.

The jobless rate fell to 3.7 percent from 3.9 percent, which represents a steep and uncommon drop, according to the Labor Department’s closely-watched monthly jobs report. Non-farm employers, however, added considerably fewer new positions than anticipated, just 134,000.

One possible reason for the slow growth of new jobs is hurricane Florence, which made landfall along the mid-Atlantic U.S. coast in the middle of last month, causing widespread disruption for homes and employers. But the extent to which the storm affected the September job numbers is impossible to determine, said officials.

Kudlow said “the economy’s running full speed ahead,” adding that he expected it to maintain the “very good pace” of job creation.

Many analysts, on the other hand, don’t believe that “unemployment near three percent is sustainable,” saying that it would inevitably result in increased pressure on wages and prices.

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