GDP and unemployment forecasts

The Minutes from the January FOMC meeting include the economic projections from governors and Fed bank presidents. Little change since November. The Fed projects GDP growth in the range of 2.8 to 3.5 percent in 2010 and the unemployment rate to finish the year in the range of 9.5 to 9.7.



Here is the full distribution of estimates. I've penciled in the Council of Economic Advisors' estimates from the Economic Report of the President and the Survey of Professional Forecasters estimates from the Philadelphia Fed. The CEA and SPF forecasts of GDP growth are in the central tendency range of the Fed's while their unemployment forecasts are somewhat more pessimistic.



One often commentators treating these forecasts almost as data - "look at the jobless recovery we're having, unemployment is expected to stay at 10 percent throughout 2010!" As I've noted on many occasions, however, the forecasts are frequently way off the mark. None of these guys thought in 2007 that we were going to have a recession, and all underestimated the severity of the recession in 2008. Given this track record I don't know why one would take the estimates for 2010 at face value.