Economic forecasts work no better than astrology.

Read 'no better than astrology' as a claim that economic forecasts have no predictive skill beyond chance or naive benchmarks. True: systematic forecast-evaluation studies show that economic forecasts (GDP, inflation, recessions and similar) generally perform no better than random or naive benchmarks at all horizons. Mostly true: they have negligible skill except at the very shortest horizons. Mixed: the evidence is split, with clear skill in some core areas and none in others. Mostly false: forecasts show measurable skill at short horizons (for example nowcasts and next-quarter forecasts beat naive benchmarks) but perform poorly at predicting recessions, turning points or longer horizons, so the claim overstates a real weakness. False: forecasts robustly beat naive benchmarks across most variables and horizons.

Set before the research began.

1. E1 The Accuracy of Forecasts Prepared for the Federal Open Market Committee Board of Governors of the Federal Reserve System (Finance and Economics Discussion Series 2015-062) · July 2015

   “We find find that Greenbook forecasts significantly outperform our benchmark forecasts for horizons less than one quarter ahead. However, by the one-year forecast horizon, typically at least one of our forecasting benchmarks performs as well as Greenbook forecasts.”

2. E2 Predicting When the Economy Will Turn (FRBSF Economic Letter 2002-07) Federal Reserve Bank of San Francisco · 15 March 2002

   “The evidence is that it is extremely difficult to predict when recessions will begin.”

3. E3 Predicting When the Economy Will Turn (FRBSF Economic Letter 2002-07) Federal Reserve Bank of San Francisco · 15 March 2002

   “It turns out that as of April of the previous year, the consensus was for positive growth in 70 of the 72 episodes (the only exceptions were Russia and Ukraine in 1996).”

4. E4 How Well Do Economists Forecast Recessions?, WP/18/39 International Monetary Fund (IMF Working Paper) · March 2018

   “The main finding is that, while forecasters are generally aware that recession years will be different from other years, they miss the magnitude of the recession by a wide margin until the year is almost over.”

A Federal Reserve evaluation [E1] found that Greenbook forecasts significantly beat benchmark forecasts at horizons under one quarter, though benchmarks typically do as well by one year out. That shows real short-horizon skill. FRBSF [E2, E3] and IMF [E4] research shows that forecasters do poorly at predicting when recessions begin and how deep they will be. This matches the "mostly false" criterion: there is measurable skill at short horizons but weak performance on recessions, turning points and longer horizons, so the claim overstates a real weakness.