US: in 45 years forecasters expected the economy to shrink the next year only once
US: GDP growth, the survey’s next-year forecast and the outcome
That was in November 2008, 10 months into the recession. Before the downturns of 1982, 1991 and 2020 they expected growth.
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The Survey of Professional Forecasters: each quarter since 1968 the Federal Reserve Bank of Philadelphia asks several dozen economists at banks, firms and research centres for their forecasts of growth, unemployment, inflation and the probability of a downturn. Here: their median forecast of US growth for the next year.
By year: blue, what the fourth-quarter survey of the year before expected for that year; orange, the outcome (growth of annual average real GDP, latest BEA data). The shading is the error.
- The one forecast of a fall: survey 2008Q4 for 2009
−0.22%
Federal Reserve Bank of Philadelphia, Survey of Professional Forecasters
- 1982: survey 1981Q4 forecast → outcome
+0.43% → −1.80%
- 1991: survey 1990Q4 forecast → outcome
+0.14% → −0.11%
- 2009: survey 2008Q4 forecast → outcome
−0.22% → −2.58%
- 2020: survey 2019Q4 forecast → outcome
+1.79% → −2.08%
The median forecast of next year’s growth of annual average real GDP in all 178 surveys from 1981Q3 to 2026Q3; “expected a fall” means a forecast below zero. A downturn is growth below −0.05% in the latest data; the chart shows the fourth-quarter survey.
Downturns are rare: annual average GDP fell 4 times in these years, and a rare event is hard to call a year ahead. Once a downturn began, forecasts for the current year went below zero quickly. They miss the other way too: in 2022–2023 they expected a recession that never came.
A question for this picture
Can a downturn be seen a year ahead at all, or will a year-ahead forecast always show ordinary growth?