Forecasting GDP: A Look Аt Тhe WSJ Economists' Collective Crystal Ball

One of the big economic numbers this month will be the Q1 Advance Estimate for GDP, due out on April 30th. With this morning's first glimpse of March Retail Sales now in hand, let's take a look at Q1 GDP forecasts from the latest Wall street Journal survey of economists conducted earlier this month. For some context, Q4 2013 Real GDP went from 3.2% in the Advance Estimate to 2.4% in the Second Estimate to 2.6% in the Third Estimate. And of course it will be subject to an annual revision in July.

Here's a snapshot of the full array of WSJ opinions about Q1 GDP. I've highlighted the values for the median, mean (average) and mode (most frequent).

As the visualization above reflects, there is a wide range of views on Q1 GDP, even if we exclude the "Cockeyed Optimist" expecting for 4.0%. However, at one decimal point the median, mean and mode are in unison at 1.5%.

Flash forward to Q2, and the outlook brightens considerably. The consensus is for GDP to essentially double its annualized rate of change from Q1.

Annual GDP for 2014

What about the annual GDP outlook? Here's what our WSJ economists think along with an overlay of the the Fed Forecast for 2014 from their most recent projections (March 19th). By the way, that 2.1% to 3.0% Fed range has a "central tendency" (Fed speak for excluding the three highest and three lowest projections) at the high side of the range: 2.8% to 3.0%.

I didn't chart the forecasts for Q3 and Q4 that factor into the annual forecasts, but here is a table showing the high, low, median and mean for all four quarters of this year as well as the annual numbers.

For a broad historical context for the latest forecasts, here a snapshot of GDP since Uncle Sam began tracking the data quarterly in 1947. The Q1 median and mean will comes in below the 1.7% 10-year moving average and less than half the 3.3% average.

Click for a larger image

I'll close with one more look at GDP -- the year-over-year percent change, which offers a somewhat disturbing perspective on where we are in the grand scheme of things, with a clearly evident downward trend.

Click for a larger image

In a little over two weeks, we'll get our first estimate of how these forecasts stack up against the real thing.