Economic forecasters have had a tough year, and the latest employment report didn’t do much to improve their batting average. The U.S. created 353,000 new jobs in January, blowing away the expectation. On top of that, the Bureau of Labor Statistics revised its previous December estimate upwards by 117,000 to 333,000 new jobs for a total of 686,000 over the past two months. There are now over 6 million more private sector jobs than at the previous pre-pandemic peak in 2019.
Defying the broadest consensus in memory just a year ago, the U.S. economy is ripping and shows few signs of stalling any time soon. Entering 2023, the median forecast for real GDP growth was around 0.3%. Yogi Berra once said, “It’s tough to make predictions, especially about the future.” This sentiment certainly rings true for economic forecasters, as the accuracy of their predictions has been put to the test in the past year.
The U.S. economy has continued to outperform expectations, with the creation of a significant number of new jobs in January and positive revisions to previous estimates. This has resulted in a total of over 6 million more private sector jobs than at the previous pre-pandemic peak in 2019. Despite initial skepticism, the U.S. economy is showing resilience and sustained growth, defying previous forecasts and expectations from just a year ago.
As we move into 2023, the outlook for real GDP growth remains positive, further challenging the predictions of economic forecasters. Yogi Berra’s famous quote about the difficulty of predicting the future is a fitting reminder of the challenges and uncertainties faced by those in the world of economic forecasting.