The OMB's Forecasts of Inflation
I wonder who runs OMB's GDP prediction model
Did you know that, tucked into the FY 2023 federal budget documents is Historical Table 10.1 - Gross Domestic Product and Deflators Used in the Historical Tables: 1940-2027 (xlsx)? Table 10.1 thus includes a prediction of GDP out five years and also a prediction of inflation.
In my usgovernmentspending.com website, that has been de-rated by Google since April 2, 2019, I use the budget predictions of GDP to compute, among other things, spending and revenue as a percent of GDP.
But it never occurred to me, until the other day, that this means that the Office of Management and Budget effectively publishes a Fearless Forecast of inflation for the next five years. In each federal budget.
I have a US Inflation Analysis page, that shows annual US inflation going back to the Civil War. Yeah, just look at the deflation in the late 19th century.
But then I thought, I wonder how the inflation predictions in Table 10.1 hold up from year to year. So I produced a chart for all the world to take a look.
The black line is actual inflation and I have put in 7.1 percent for FY 2022 that ended September 30, based on numbers from the Bureau of Economic Analysis (xlsx).
The other lines are the predictions from four recent federal budgets. As you can see, the fearless forecasters at the OMB didn’t forecast any increase in inflation due to the “money printer go brrrr” events of 2020 until the FY 2023 budget published in March 2022. That’s the blue line on the chart. You can see the blue line emerging from the black actual line to predict “transitory” inflation of 4.5 percent for 2022.
So that’s where the “transitory” narrative came from.
And note that in the FY22 budget published in May 2021 they just expected a wee little increase in inflation of 2 percent instead of the actual inflation of over 4 percent.
(Note to right-wing neo-Nazi ultra-MAGA conspiracy theorists: If the Feds are this bad at forecasting inflation for the coming year, what price their fabulous climate models?)
Note that the three federal budgets prior to FY 2023 didn’t see any inflation showing up.
Yeah. And I gotta bridge to sell you.
Hey there Google content monitors! Whaddya think? Is this misinformation, disinformation, or malinformation, as defined by the Cybersecurity and Information Security Administration?
Or is it Truth with a capital T right here in River City?