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White House: Economic and jobs growth will remain steady

White House: Economic and jobs growth will remain steady
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The White House said Monday that the U.S. economy and the labor market will maintain steady growth over the next several years, even amid uncertainty about the direction of the global economy.

Economic growth is expected to rise to 2.7 percent this year while the jobless rate ticks down to about 4.5 percent by the end of the year, which would be close to full employment, according to a new report sent to Congress by President Obama’s Council of Economic Advisers.

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However, the economic report cautioned that the expansion will brake slightly over the next two years to 2.5 and 2.4 percent in 2017 and 2018, respectively.

The unemployment rate, which finished last year at 5 percent and fell to 4.9 percent in January, its lowest level since February 2008, is expected to tick back up slightly to 4.6 percent in 2017.

“In 2015, we continued to take steps forward, with strong job growth and wages rising at their fastest rate in the recovery,” the president said in the report.

“So claims that America’s economy is in decline or that we haven’t made progress are simply not true,” he said.

“What is true — and the reason that a lot of Americans feel anxious — is that the economy has been changing in profound ways, starting long before the Great Recession.”

Last year, job growth exceeded 200,000 a month for the year, extending the longest streak of private-sector job growth on record, producing the best two years of job growth since the 1990s and the fastest two-year decline in the unemployment rate since the 1980s, according to the economic report. 

"We are less reliant on foreign oil than at any point in the previous four decades," Obama said.

"Nearly 18 million people have gained health coverage under the Affordable Care Act, cutting the uninsured rate to a record low. And we’ve done all this while dramatically cutting our budget deficit."

Consumers were more confident about the economy than in any year since 2004.

And while wage growth remained too low it still grew faster in 2015 than at any time since the recovery began, the report said. 

But while the domestic signs — labor market growth, consumer confidence and a more robust housing market — point to continued resilience in the United States, the economy faces headwinds from abroad.

Brazil, Canada, China, India, and the European Union are growing slowly, weighing on the global economy. 

"It will be crucial that the world economy not return to a model prevailing prior to the crisis where too much of the global economy relied on the U.S. consumer," the report said.  

"Still, forecasts are for these global headwinds to continue to weigh on U.S. growth in the near future — which is why both strengthening the U.S. economy to ensure it is more resilient while working with partners abroad on their growth is a key priority for the president."

The report calls for passage of the Trans-Pacific Partnership (TPP) trade deal to boost the economy.

"The complicated global economic environment underscores the importance of the president’s trade agenda in opening new markets and ensuring a level playing field for U.S. firms," it states.

It also calls for parties around the world to take steps to ensure that income inequality is addressed.

Benefits from growth should be "shared, including by addressing the long-standing challenge of inequality,” wrote CEA Chairman Jason FurmanJason FurmanProgressives offer mixed messages on key Biden economic aide Former Treasury secretaries from both parties call for immediate COVID-19 relief deal Economists call for more stimulus checks MORE, Sandra Black and Jay Shambaugh in a blog post summarizing the 435-page economic report.

They wrote that "despite marked progress for American households since the financial crisis, the unequal distribution of income, wealth and opportunity remains one of the most important challenges facing the U.S. economy."

"Indeed, inequality is higher in the United States than in other large advanced economies, and it has grown faster in recent decades," they said.