Survey Of Professional ForecastersEdit
The Survey Of Professional Forecasters (SPF) is a long-running quarterly exercise in macroeconomic forecasting conducted by the Federal Reserve Bank of Philadelphia. It assembles forecasts from a broad cross-section of economists and analysts in the private sector and academia, aiming to produce a window into what the private economy expects to happen in the near and medium terms. The SPF focuses on core variables such as real Gross Domestic Product growth, the unemployment rate, and inflation (as measured by a price index), and it publicizes forecasts for multiple horizons as well as measures of dispersion. Because it reflects private-sector expectations rather than official accounting, the SPF is often watched as a gauge of how households, firms, and markets anticipate the economy moving in the quarters ahead.
The SPF is frequently cited by policymakers, researchers, and market participants because it aggregates professional judgment in a transparent format. It serves as a counterpoint to government statistics and model-based projections, offering a sense of what a diverse set of forecasters believe is likely to unfold given current information and prevailing policy conditions. In practice, the SPF has become a benchmark for evaluating the market’s and policymakers’ own expectations, and it is used in academic work to study the accuracy and bias of professional forecasts over time. See Forecasting for a broader look at how professionals attempt to predict economic outcomes, and see Monetary policy for the link between expectations and central-bank decisions.
Methodology and scope
The SPF draws input from forecasters across the private sector, including financial institutions, corporate research departments, universities, and independent research organizations. Respondents submit point forecasts and sometimes distributional information for several key variables over multiple horizons. The typical set of questions covers short-run and medium-run horizons (for example, the next four quarters) and longer horizons as appropriate, with the results presented in terms of central tendencies (such as the median) alongside measures of dispersion to convey uncertainty.
Two notable features of the SPF are its emphasis on transparency and its treatment of uncertainty. The survey reports the central tendency of forecasts, along with the dispersion among forecasters, often illustrated with fan charts or similar visuals that depict a range of plausible outcomes. This structure makes it possible to compare not only the most likely outcome but also the level of disagreement in the professional community. See Fan chart and Uncertainty for related concepts about how forecasters convey risk and dispersion.
Because the SPF aggregates independent judgments, it can serve as a barometer of private-sector sentiment about the economy’s trajectory. However, like any survey of opinions, it is subject to sample selection, response rates, and the possibility that forecasters tune their models to recent data or policy signals. The methodological appendix and accompanying documentation provide details on how respondents are selected, how forecasts are combined, and how revisions and outliers are treated. For comparisons to other forecasting approaches, see Econometric forecasting and Market-implied forecasts.
Use in policy and markets
Policymakers and researchers use SPF insights to assess whether private-sector expectations align with official projections or with the trajectory implied by current policy. When forecasts point in a similar direction across forecasters, that agreement can bolster confidence in a given outlook; when forecasts diverge, it signals contested views about the economy, policy risks, or the transmission mechanism of monetary and fiscal actions. The SPF thus functions as a check on consensus and as a source of information about how the private sector reads policy signals.
Markets also monitor SPF results because they influence pricing of assets and the timing of investment. Corporations may adjust capital plans in light of anticipated demand, while lenders and investors incorporate forward expectations into credit terms and risk assessments. The SPF complements other benchmarks such as the data on inflation and unemployment and alongside market-derived expectations captured through instruments like Treasury futures and bonds. See Market expectations for a broader discussion of how professional forecasts interact with financial markets.
In research, SPF data enable analysis of the accuracy, bias, and evolution of expert forecast performance. Scholars use the series to study whether forecasters systematically over- or under- predict inflation, growth, or unemployment, and to explore how forecasts respond to policy surprises or data revisions. See Forecast error for a closer look at how prediction errors are interpreted in macroeconomics.
Controversies and debates
Like any tool rooted in expert judgment and institutional practice, the SPF invites debate about what it can and cannot tell us. Proponents emphasize that the SPF provides a transparent, diverse, and nearly real-time view of private-sector expectations, which is valuable for both policy and planning. Critics, including some from the political left and others skeptical of centralized forecasting, contend that forecasts can be biased by incentives, the composition of respondents, or the structure of models used by forecasters. From a practical standpoint, no forecast is a perfect predictor; unexpected shocks, regime changes, or policy surprises can render even well-anchored projections inaccurate in the short run.
A frequent point of contention is whether the SPF’s central tendency is sufficiently informative when the economy faces unusual conditions, such as financial crises or rapid policy pivots. In response, supporters argue that the SPF’s emphasis on dispersion and the diversity of forecasters helps reveal where opinions diverge, signaling risk and uncertainty rather than a false sense of certainty. They also note that the SPF is not a tool of policy advocacy; it is a diagnostic of expectations, which helps households and firms prepare for different plausible paths.
From a pragmatic, market-friendly perspective, some criticisms of the SPF from the political fringes revolve around the notion that forecasts reflect the interests of ellite institutions or that consensus can mask structural risks not captured by standard models. Proponents counter that the SPF’s independence, the breadth of its participants, and the publication of methods and responses reduce the likelihood of manipulation, while heightened transparency improves accountability. In this frame, some criticisms labeled as “woke” or ideologically motivated miss the point: the SPF’s value lies in its methodological openness, not in advancing any particular policy agenda. The core counterargument is that sound economic forecasting should be judged by accuracy, robustness, and the quality of the information it conveys, not by a political narrative about who should be predicting what.
Historical context and key findings
Over the decades, the SPF has tracked changes in forecasting performance, model structure, and respondent composition. Analyses of historical forecasts reveal patterns in accuracy across variables and horizons, illuminating how well professional forecasters have anticipated turning points, inflation dynamics, and labor-market developments. Readers interested in how the SPF’s track record stacks up against other forecasting approaches can compare it to model-based econometrics, market-implied expectations, and alternative survey series. See Forecast accuracy and Economic forecasting for related discussions on reliability, bias, and methodology.
The SPF’s enduring relevance rests on its ability to capture a cross-section of informed professional opinion at a moment when policy and markets rely on forward-looking signals. In times of policy experimentation or rapid change, the SPF can serve as a check on whether the private sector is pricing in the same risks and opportunities that policymakers are pursuing, or whether a divergence exists that warrants closer scrutiny.