Where Is GDP Headed? Don’t Ask an Economist!

No, Yogi Berra never said, “It is dangerous to make forecasts, especially about the future,” even though a recent Google search produced several claims that he did. The website Quote Investigator also disproves attributions to Samuel Goldwyn and Niels Bohr, among others, concluding that the comical proverb originated in Danish, author unknown. Whoever first said it, though, made a point worth bearing in mind.

Economic forecasts attract attention at this time of year. Companies have to make assumptions about future demand for their goods or services, on which they budget their head count, capital spending, and more. Thoughtful budgeting is also imperative for governments, at least at the state and local levels, where printing money isn’t an option if revenue falls short of outlays. Also, investment managers’ clients expect them to begin the year by laying out their strategies for the next 12 months. Economists’ predictions of indicators such as gross domestic product are key inputs to all this planning.