Four times per year, the FOMC releases economic projections for overall personal consumption expenditures inflation, core personal consumption expenditures inflation, real gross domestic product growth, and the unemployment rate. These projections are commonly known as the Summary of Economic Projections (SEP) and are offered in a variety of ways: as the range of predictions and as the central tendency of predictions, in the short run (one, two, or three years out) and in the longer run. One of the more interesting ways to use the SEP release is to compare forecasts over time.
With ALFRED (our archival FRED database), these comparisons are easy to make. This graph shows how the real GDP growth rate forecasts for 2008, 2009, and 2010 have been revised across three consecutive SEP releases (or “vintages”): November 2007 in blue, February 2008 in red, and May 2008 in green. The FOMC twice lowered the projected real GDP growth rate for 2008 and once lowered the projected growth rate for 2009. The projected growth rates for 2010 were raised across all three releases.
How this graph was created: Place the series “GDPC1CTM” into an ALFRED graph three times: Within each data series setting, select the appropriate vintage. Limit the time range using the scroll bar below the plot area.