Wednesday, September 28, 2011

It Depends on Which Economist You Ask...

Bloomberg conducted a survey of economists from Sept. 2 to Sept. 7 to obtain their projections of economic growth, job growth, and unemployment for the next two years. See here. The table below summarizes the results.

============================================================
                        Table of Forecasts
============================================================
                 GDP     GDP     Jobs (thous)     UR Change
                2012    2013    2012    2013    2012    2013
============================================================
Median           0.6     0.2     275      13    -0.2    -0.1
Count             34      30      28      28      28      26
------------------------------------------------------------
Action Eco       0.0     0.0       0       0     0.0     0.0
AIG              0.7     0.1     250     100    -0.5    -0.2
Aletti           0.4     0.0     n/a     n/a     n/a     n/a
Anderson Eco     0.5     0.5     500     500    -0.5    n/a
BBVA             1.3     0.9     900     900    -0.8    -0.7
BNP Paribas      0.5    -0.3     500    -300     n/a     n/a
Clearview Eco    0.8     0.8     750     750    -0.5    -0.5
DB               0.0     0.0       0       0     0.0     0.0
Econoclast       0.0     0.0       0       0     0.0     0.0
Euler Hermes     0.0     0.0       0       0     0.0     0.0
Fact & Opinion   0.5     0.5     500   1,000    -0.1    -0.3
Faifield         n/a     n/a     300     200    -0.2    -0.3
Fannie Mae       0.7     0.0     500       0     0.0     0.0
Goldberg Inv     n/a     n/a     150     100     n/a     n/a
Goldman Sachs    1.5     n/a     n/a     n/a     n/a     n/a
Guerrilla        1.5    -1.0     200       0    -0.2     n/a
H. Johnson       0.2     0.3      25      45     0.2     0.2
JP Morgan        0.1     n/a     n/a     n/a     n/a     n/a
MacroEco         1.3     n/a     n/a     n/a     n/a     n/a
MacroFin         1.5     1.5   1,000   1,000    -1.0    -1.0
Manulife         1.5     0.5   2,000     700    -1.0    -0.3
Mizuho           0.2     0.0     n/a     n/a     n/a     n/a
Moodys           2.0     1.0   1,000       0    -1.0    -0.4
NFIB             0.0     0.0       0       0     0.0     0.0
Niagara          1.0     0.1     125       0     0.0     0.0
Nord             0.4     0.5     n/a     n/a    -0.2    -0.4
Parsanec         0.5     0.5   1,100     700    -1.0    -0.5
Pierpont         0.3     0.0      50       0    -0.2     0.0
Raymond James    0.3     0.2     350      25    -0.5    -0.1
SPSU             0.9     0.1     110       0     0.0     0.0
SocGen           1.7     0.8       1       1    -0.4    -0.2
State Street     1.2    -1.0     340    -370    -0.2     0.3
Standard Charter 1.0     0.5     600     300     0.0     0.0
Unicredit        2.0     n/a     n/a     n/a     n/a     n/a
W Hummer         0.2     0.2     150     200    -0.1    -0.1
J Forest         1.0     1.0     n/a     n/a    -1.0    -0.5
============================================================

The economic forecast obviously is not favorable for the country as a whole, unemployed workers, or President Obama's reelection prospects. But what I find most interesting about the survey is the wide spread of economic growth projections, ranging from zero to 2 percent. Expectations for job growth are similarly varied; some economists expect no net job growth, while others expect more than 2 million new jobs to be created in 2012. At least there seems to be some correlation between job-growth expectations and economic-growth projections. However, what are we to make of the wide variation in economists' projections of both? Does this survey tell us more about the unsatisfactory state of our macroeconomic models than it does about the state of the macroeconomy?

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