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Employment Projections
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Macro Projections Evaluation: 2006–2016

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 GDP and the unemployment rate. 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 2006–16 projection of GDP was significantly higher, 20.0 percent, than potential GDP2. When the projection was made the economy was peaking right before the 2007–2009 recession. Some of this cyclical growth was misattributed as structural. A naïve projection3 also misattributed much of this growth, performing slightly better at 18.9 percent (See Table).
Table 1. GDP projections, actual, and potential (in millions, $2009)

Levels

CBO Potential Estimate

Difference

in Percent

CBO Potential

16940

.

.

BLS 2016 projection

20322

3382

20.0

Naïve

20143

3203

18.9

Actual

16716

-224

-1.3

NOTE: Data as of April 11, 2018.


 

Gross Domestic Product, historical and projected

 

 

Unemployment Rate

  • BLS projected an unemployment rate that ended up being higher than potential, 5.0 percent compared 4.6.
Table 2. Unemployment rate, projected, actual, and potential

Levels

CBO Potential Estimate

Difference

in Percent

BLS 2006 projection

5.0

0.4

8.1

Actual

4.9

0.3

6.0

CBO Potential

4.6

.

.

NOTE: Data as of April 11, 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 2006) is calculated for the past 10 years, and projected forward 10 years to 2016.

 

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Last Modified Date: August 1, 2018