1. Outlook

    CBO: U.S. Deficit Dips Slightly

    FILE - This Monday, Aug. 1, 2011 picture shows the U.S. Capitol just after the House voted to pass debt legislation on Capitol Hill in Washington. Credit rating agency Standard & Poor's says it has downgraded the United States' credit rating for the first time in the history of the ratings. The credit rating agency says that it is cutting the country's top AAA rating by one notch to AA-plus. The credit agency said late Friday, Aug. 5, 2011 that it is making the move because the deficit reduction plan passed by Congress on Tuesday did not go far enough to stabilize the country's debt situation. (AP Photo/Jacquelyn Martin)

    Jacquelyn Martin / AP Photo

    The United States will continue to run a large deficit over the next 10 years, says the Congressional Budget Office. However, it won't be as high as its previous prediction. The country is expected to rack up a $1.3 trillion deficit this year, the third-largest shortfall in the past 65 years. The annual deficit over the next decade will average 4.3 percent of GDP, and new debt will total around $8.5 trillion over the next 10 years. The CBO also predicted modest economic growth of 3.6 percent over the next three years and unemployment above 8 percent until 2014.

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