A Contrast in Numbers: The White House Forecast vs. BLS

The White House grows out of its deficit problem by way of a fantasy forecast. And then tells us it's BLS that's cooking the numbers.

One of these lines is not like the other:

The figure shows 3 forecasts for real GDP growth over the next decade.: CBO and Blue Chip (an average from 50 private forecasters) and the top line which is the latest White House version from their Mid-Session Budget Review.

Here’s their full table:

They forecast growth to be a full point over the underlying trend (about 3% instead of about 2%), but somehow inflation drifts comfortably back down to target. Longer-term interest rates also drift down nicely (50 bps below CBO), and the combination of that, tariff revenues (they project $4.8 trillion over 10 years!), scoring tricks, and much faster growth solves their fiscal problem.

Here’s their deficit projections before and after their “savings,” tariffs, and other projections (remember, these folks score their budget bill as deficit reducing).

I won’t belabor this. It’s obviously not serious. One particularly nutty bit is that their underlying productivity assumption has to be through the roof. That is, CBO and others already project labor supply to slow to around 0.5% per year, and that’s before the Trump/Miller anti-immigrant crusade, which likely further lowers that growth rate. Because real GDP growth equals labor force growth plus productivity growth, these folks are assuming the latter grows around 2.5% per year, about a point higher than the current trend.

Maybe there’s an AI story in there somewhere but I don’t think you could find a forecaster who’d go there to this extent (and still end up with 3.7% unemployment!).

To be fair, every admin juices this forecast (in the Obama and Biden years, terminal growth rates often came in slightly north of 2%), but never this much, unless you go back to Trump 1.

Meanwhile, the WSJ reports that the Trump admin is “preparing a report laying out alleged shortcomings of the Bureau of Labor Statistics’ jobs data…The report takes a critical look at the BLS and lays out a historical overview of the agency’s jobs-data revisions….The administration is considering publishing the study, written by the Council of Economic Advisers, in the coming weeks…”

Would the CEA, even under this president, really write a hit piece on the BLS, which remains the gold-standard of unbiased, non-politicized data analysis? I doubt it and expect more of a dispassionate review of the history and explanation of the revisions to the payroll survey. Every CEA I’ve ever had any contact with, regardless of the party in charge, has the deepest respect for the work of the BLS and I suspect that holds even today.

Of course, that won’t stop the political arm of the operation from waving their doc around as false proof that the job numbers are actually great, at least they are after you apply the same techniques that generated their forecast above. You know, the ones that made a $3 trillion deficit-raising bill become a $1 trillion deficit-reduction bill??

But it’s all nonsense. As I’ve written before, any problems at BLS have nothing to do with the staff and everything to do with underfunding that staff and the surveys that procure the data. You want to lower the revisions and boost falling survey response rates? Invest in the staff and the surveys. It’s the only way to get there.

But that’s, of course, not what the Trumpies want. The want to try to hide the negative impact of their policies and when “shaking the keys” (“Don’t look there! Look here!”) doesn’t work, they’ll attack the messengers.

This won’t work for them, anymore than their impossibly sunny forecast will lead anyone who is not on their payroll to worry less about the future path of growth or the fiscal outlook. In fact, the more they try to hide the data, the more people will know they’ve got something to hide.

Let me leave you with this, which I found moving. As I understand it, it’s a statement that was written (anonymously, which is the only way to do this right now) by BLS staff and read at a rally at the end of last week. It is true, powerful, informative, and an important reminder of the remarkable integrity of a group of people who are still just trying to keep their heads down and do their jobs, even while they are under relentless fire by the forces of darkness.

I don’t think I ever quite realized how the act of “publishing reliable data” could become an act of bravery in the struggle to preserve democracy. But that’s exactly what it is.