A table in a little-read section of Obama’s first budget — released in May 2009 — shows that the Congressional Budget Office was predicting at the time that the economy would contract by 3% in 2009. That’s not far from the actual 3.5% decline. And the CBO was spot on in its 2010 forecast for a 2.9% gain in real GDP. The actual figure was 3%.
Nor were economists wildly off on their unemployment forecasts. The Blue Chip consensus in early 2009 — also listed in Obama’s first budget — predicted unemployment for that year would average 8.9%. The actual number was slightly above 9%. It pegged unemployment for 2010 at 9.5%, just below the actual result of 9.6%.
Meanwhile, a memo drafted by Obama’s economic team in December 2008 that recently came to light makes it clear that they were fully aware the economy was performing far worse than the official numbers at the time suggested, noting that “forecasts have become decidedly more pessimistic in recent days” and that “further negative revisions seem more likely.”