(CNSNews.com) – When unveiling the most recent Congressional Budget Office (CBO) "Budget and Economic Outlook" annual report, CBO director Doug Elmendorf warned that economic forecasting is "always uncertain."
Elmendorf was asked, "Have you ever had to do a projection with this much uncertainty and sort of ‘wiggle room’ for every single variable?"
"Well, so I arrived in January of 2009 here, it seems like it’s been a pretty uncertain situation ever since then. I mean, economic forecasting is a hard business. I spent some time doing that at the Federal Reserve Board and we have terrific people here doing it but it’s always hard, it’s always uncertain," he said on Wednesday at the Ford House Office Building on Capitol Hill.
"We report every year on the accuracy of our economic forecast because we think it’s an important piece of transparency and we’re no worse at it than any body else but it is a hard business to get right at any time and but I think without doubt, it is harder when one is experiencing very unusual economic circumstances. There’s been no period of time in CBO’s history, where we’ve had as severe a recession as we have now and one can look to other countries that have experienced financial crises and see what has happened in their economies in the wake of those crises."
When making the case for the passage of the $787 billion American Recovery and Reinvestment Act (ARRA) or economic stimulus package in February 2009, the Obama Administration predicted that the legislation would bring the unemployment rate down to 8 percent.
According to the Bureau of Labor Statistics, the unemployment rate is currently 9.1 percent.
On his official blog, Elmendorf said, "With modest economic growth anticipated for the next few years, CBO expects employment to expand slowly. The unemployment rate is projected to fall to 8.9 percent in the fourth quarter of this year and to 8.5 percent in the fourth quarter of 2012 and then to remain above 8 percent until 2014."
Elmendorf told reporters that in the past, the CBO has had "somewhat similar sections" about "uncertainty in economic forecasting" within each of the reports he can remember.
"So, I don’t mean to suggest this is more uncertain than the one we did in January or last August or January of 2010 but I think this whole period has been uncertain," he said.