In June after its FOMC meeting, the Federal Reserve has published its forecasts for 2013. GDP growth is expected for 2013 to be in the range [2.3 – 2.6%]. The middle of the range is 2.45%.
We then have to compare this number to the result of the first two quarters.
In Q1 GDP growth was 1.1% at annual rate and in Q2 it was 1.7%. This means that the carryover growth at the end of the second quarter is just 1.05%. (carryover growth is the average growth for 2013 if Q3 and Q4 GDP level remains at Q2 level (last known)).
To converge to 2.45% on average for 2013, GDP numbers have to be 7.4% at annual rate both in Q3 and Q4.
Such a sequence has not been seen since the beginning of the 80’s when Ronald Reagan had a very strong program to boost the economy.
The current fiscal policy is conditionned by sequestration and we see that since the beginning of 2010 government expenditures (local and federal) are a drag on GDP growth.
Once again, the Fed’s behavior will be interesting to watch.
Nevertheless as it was mentionned by Tim Duy (@TimDuy), (see here): in the past unemployment rate forecasts were more accurate than GDP forecasts. Even with that in mind the gap will be large and will probably require interpretation by Ben Bernanke.