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Photo: John McDonnell/The Washington Post via Getty Images

The national deficit is forecast to increase sharply to $3.7 trillion in the 2020 fiscal year, according to a Congressional Budget Office projection out Friday.

By the numbers: The report paints a grim picture of the U.S. economy in the second quarter of 2020. The unemployment rate is expected to average roughly 14% in that time, while GDP is projected to decline by about 12%. Interest rates on 3-month Treasury bills and 10-year Treasury notes are expected to average around 0.1% and 0.6% respectively.

  • The report projects a 15% average unemployment rate during both the second and third quarters of 2020.

Why it matters: The numbers quantify the scale of the measures Congress has taken to address the coronavirus pandemic. In March, before Congress enacted most of its legislation to address the outbreak, the CBO projected $1 trillion deficits for both 2020 and 2021.

  • In fiscal year 2021, the new projection has the deficit at $2.1 trillion.
  • The CBO projects publicly held federal debt to be 101% of GDP by the end of the fiscal year.
  • It also anticipates the deficit will be 17.9% of national GDP this year, and 9.8% of GDP in 2021 — compared to 4.6% in 2019.

Go deeper

Coronavirus pandemic pushes U.S. economy to worst-ever contraction

Data: Bureau of Economic Analysis; Chart: Axios Visuals

The U.S. economy shrank at an annualized 32.9% rate in the second quarter — the worst-ever contraction on records that date back to 1947, the government said on Thursday.

Why it matters: Widespread lockdowns to contain the spread of the coronavirus pandemic ravaged the economy in a way that's never been seen in modern times, and hope for a swift recovery has been dashed as cases have surged nationwide.

Pandemic wipes out 5 years of economic growth in 3 months

The economic decline between April and June caused by the coronavirus pandemic brought the U.S. GDP back to levels last seen in 2015, according to data released Thursday.

Why it matters: While we fell into the hole swiftly, economists are dashing hopes of an equally swift recovery. They warn it could take years for the U.S. to recover.

Ina Fried, author of Login
Jul 31, 2020 - Technology

Big Tech's take grows as economy tanks

Illustration: Sarah Grillo/Axios

While the rest of the U.S. economy was falling off a cliff, Big Tech saw its business soar.

The big picture: Thursday morning, government economists reported a 30% drop in GDP for the second quarter — the largest decline, by far, since the numbers have been reported.