An economic forecast is a projection of future economic trends or events. It is usually made by economists using a variety of methods. The most popular method is econometric modeling. This involves examining historical data inputs and assumptions to determine the relationships between one or more economic variables. The results of the model are then incorporated into reports that typically include information graphics and commentary to help explain the forecasts.
As a result of the tariffs and higher interest rates, aggregate spending should slow as households find it harder to finance consumption. Higher inflation should also restrain consumer spending. We anticipate a gradual return to growth as the economy adjusts to these new conditions.
Historically, GDP forecasts have been presented as year over year, rather than quarter over quarter. This convention was based on the greater availability and accuracy of annual GDP data, although the impact of revisions to quarterly data can still be substantial. We are among a growing number of analysts who present GDP forecasts as quarter over quarter, allowing the effects of revisions to be more readily understood and appreciated.
