<\/span><\/p>\n Figure 1:<\/strong> GDP as reported (bold black), CBO projection (tan), Administration forecast (red squares), Survey of Professional Forecasters median forecast (green), and GDPNow of 9\/10 (light blue square), all in bn.Ch.2017$ SAAR. Source: BEA 2025Q2 second release, CBO Current Economic Outlook<\/a>, OMB Mid-Session Review Technical Supplement<\/a>, Philadelphia Fed (August 2025), and author’s calculations.<\/em><\/p>\n The administration forecast is substantially outpacing the CBO and SPF in the out-years. From the CBO report<\/a>:<\/p>\n The major factors underlying most of the changes in CBO\u2019s projections are the 2025\u00a0reconciliation act (Public Law\u00a0119-21), higher tariffs, and lower net immigration (the number of people who enter the United States in a given period minus the number who leave in that period).3<\/a><\/span>\u00a0CBO\u2019s updated projections also reflect interactions among those factors as well as data released since January. Those data include equity prices and inflation that were higher, and residential investment that was weaker, than in CBO\u2019s January projections\u2014reflecting, in part, higher interest rates and a slower rate of household formation than previously projected.<\/p>\n The pattern of economic growth over the next several years reflects differences in the timing of the effects on the economy of the reconciliation act and of the changes in tariffs and net immigration:<\/p>\n As noted in this post<\/a>, the Troika forecast seems unlikely to be realized, if GDP follows an ARIMA(0,1,0).<\/p>\n Near term, given the distortions in measurement arising from tariff front-running, it’s more interesting to look at comparisons of final sales to private domestic purchasers (aka “core GDP”) as a measure of aggregate demand. We don’t have the detailed information to recreate the Administration’s estimate of this variable, but we do for the SPF.<\/p>\n Figure 2: <\/strong>Final Sales to Private Domestic Purchasers as reported (bold black), CBO projection (tan), Survey of Professional Forecasters median forecast (green), and GDPNow of 9\/10 (light blue square), all in bn.Ch.2017$ SAAR. CBO and GDPNow series estimated summing up projections of components. Source: BEA 2025Q2 second release, CBO Current Economic Outlook<\/a>, OMB Mid-Session Review Technical Supplement<\/a>, Philadelphia Fed (August 2025), and author’s calculations.<\/em><\/p>\n CBO matches the SPF median trajectory fairly closely. Presumably, the administration’s would be substantially higher. Both CBO and SPF median indicate a substantial slowing in growth of “core GDP” (note both figures are on a log scale).<\/p>\n <\/p>\n <\/p>\n![\"\"](\"https:\/\/econbrowser.com\/wp-content\/uploads\/2025\/09\/gdppix7300.png\")
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