WSJ Economists' GDP Forecasts: 3.1% in Q4, Falling to 2.2% in Q1 2012

January 16th, 2012

by Doug Short

A big economic announcement this week will be tomorrow's Advance Estimate for Q4 GDP from the Bureau of Economic Analysis. The final number for Q3 GDP was 3.1%. The general consensus is that Q4 will show a significant decline in this broad measure of the economy. weighs in at 1.8%. According to, the consensus for Q4 is 1.0%. However,'s own estimate, I should point out, is considerably lower at 0.1%.

The substantial spread between the consensus and its own estimate prompts a question. What is the distribution of opinions among a broad range economists on this benchmark metric? Is the range wide or narrow? Let's review the data in the Wall Street Journal's January survey of economists, conducted January 4-8, which is available in Excel format here. Fifty of the 52 economists solicited in the survey responded. The chart below arranges their Q4 GDP forecasts horizontally from low-to-high to give us a visualization of the distribution of responses and any outliers.

As the chart suggests, the majority of professionals fall into a fairly narrow range around the 1.5% Median (middle), which is also the Mode (most frequent number). The Mean (average) was slightly higher at 1.56% (1.6% at one decimal place). A conspicuous feature of this visualization is the half-dozen outliers in the 2.4% to 2.7% range.

Looking Ahead to Q1

What do the economists see for Q1 of 2013? Not surprisingly, the forecast spread widens as economists look further into the future, ranging from 0.5% to 3.1%. The Mode, at 1.5%, is the same as for Q4 2012; the Median is fractionally higher at 1.6%. The Mean is a bit higher at 1.7% resulting from the increasing optimism at the high end.

The numbers noticeably improve for Q2 2013, with the Median and Mode both rising to 2.0%, and the Mean rises to 2.2%. Also, we have a pair of optimists who put the Q2 number at 3.6%, which is above the historic average of 3.2% since the inception of quarterly GDP in 1948. Incidentally, the 10-year moving average is only 1.7%.

I'll close with the WSJ economists' forecast for the annual 2013 GDP.

Here we see the Median rise to 2.2% and the Mean to 2.2%. The Mode (most frequent forecast) curiously slips a bit to 1.9%.

I'm posting this at Tuesday midday. On Wednesday morning we'll be able to determine how close the WSJ consensus on Q4 GDP (first chart above) is to the BEA's Advance Estimate.

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