And after losing one-half of its value during the financial crisis, the stock market now exceeds its pre-recession peak in nominal terms. Growth would be higher this year but for U.S. fiscal policy.
The Congressional Budget Office (CBO) estimates that federal tax increases and spending cuts will slow the pace of real gross domestic product (GDP) growth about 1–1/2 percentage points this year.2 Tight fiscal policy may also be preventing faster reductions in unemployment.