February 12, 2015 – “For nearly four decades, the Congressional Budget Office has prepared economic forecasts that underlie the agency’s projections for the federal budget and cost estimates for proposed federal legislation. In particular, forecasts of output, inflation, interest rates, and income play a significant role in the agency’s budgetary analysis; for example, projections of wages and salaries are used to forecast individual income tax receipts. CBO regularly evaluates the quality of its economic forecasts by comparing them with the economy’s actual performance and with forecasts by the Administration (as published in the annual budget documents prepared by the Office of Management and Budget) and the Blue Chip consensus—an average of about 50 private-sector forecasts. Such comparisons may indicate the extent to which imperfect information and analysis might have caused CBO to “miss” patterns or turning points in the economy. They also may identify areas where CBO has tended to make larger errors than other analysts. This report evaluates CBO’s macroeconomic forecasts over two-year and five-year horizons. The periods used for the evaluations differ by variable and by forecast horizon, depending on the availability of the needed data.”