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Employment Projections
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Macro Projections Evaluation: 2004–2014

BLS projects an economy at full employment. Therefore it is most informative to assess the accuracy of projections through comparisons to an economy at full employment, also known as potential values1. Potential values are available for gross domestic product (GDP), the unemployment rate, and the labor force for which comparisons are made below. Actual values, although affected by cyclicality and not directly comparable, are also included for reference. For more information, refer to our evaluation methodology.

GDP

  • The BLS 2014 projection of GDP was 7.3 percent higher than potential GDP2 (See Table).
  • To assess whether a 7.3 percent difference is "good", a naïve model3 is used. The naïve model was worse, at 12.3 percent higher than potential GDP.
Table 1. GDP projections, actual, and potential (in millions, $2009)

Levels

CBO Potential Estimate

Difference

in Percent

BLS 2014 projection

17500

1194

7.3

Naïve

18319

2014

12.3

Actual (BEA)

16013

-292

-1.8

Potential (CBO)

16306

.

.

Note: Data as of March 29, 2018.

 

Gross Domestic Product, historical and projected

 

Unemployment Rate

  • BLS projected an unemployment rate of 5.0 percent compared to the unemployment rate at potential of 4.9 percent.
Table 2. Unemployment rate, projected, actual, and potential

Rate

CBO Potential Estimate

Difference

in Percent

BLS 2004 projection

5.0

0.1

1.6

Actual

6.2

1.3

26.0

CBO Potential

4.9

.

.

Note: Data as of March 29, 2018.


 

Unemployment rate

 

 

Note

1 Potential values are estimated by the Congressional Budget Office (CBO). For more information on the potential output assumption and how it relates to BLS projections see https://www.bls.gov/opub/mlr/2017/article/full-employment-an-assumption-within-bls-projections.htm

2 Projections in 2004 were done in 2000 dollars. CBO estimates are in 2009 dollars. The 2004 projections are reweighted to 2009 dollars in order to compare the two series.

3 For the naïve model, the average growth rate for CBO's potential GDP (at the base year) is calculated for the past 10 years, and projected forward 10 years from 2004

 

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Last Modified Date: August 1, 2018