The climbing limo method of forecasting future GDP in the United States projects the nation's economic output in the now-finished third quarter of 2025 will be around $32.7 trillion.
That estimate was generated using one of the simplest of forecasting methods. We pulled the just-revised nominal GDP estimates for the second and fourth quarters of 2025s, drew a line through them, then extended the line out three more quarters into the future to project that estimate!
That's how the Climbing Limo forecasting method works, which is just as simple as it sounds. In doing that, we're assuming that whatever momentum the U.S. economy had going in the last half of 2025 will make itself known in the quarter that just came to an end on 30 September 2026.
How well does that method work in practice? You can see for yourself in the following chart shows the climbing limo method's forecast against the recorded nominal GDP over the past 12 quarters for which GDP data has been finalized. At least, as that data has been finalized outside of the BEA's annual revisions like the one they just released covering the period from 2021-Q1 through 2026-Q2, which the chart incorporates across the board for the period it covers.
One of the neater things about the Climbing Limo forecasting method is that even when it's way off, as can happen when new periods of recession or recovery take place, it's still giving you important information about how the economy's momentum is changing. Not that it matters for the particular period covered in the chart.
Getting back to 2026-Q3's projected nominal GDP, the Climbing Limo forecast is anticipating very little change from the nominal GDP level of 2026-Q2, although we anticipate the actual GDP level will come in higher than this projection. The initial estimate of 2026-Q3's GDP will be released later this month, but will be revised at least two more times over the next two months as more data is collected before it is relatively settled.
The chart also shows the projections for what the Climbing Limo anticipates for GDP in the fourth quarter of 2026 and the first quarter of 2027. We'll be discussing 2026-Q4's projected GDP in the next edition of this series, before its initial estimate becomes available at the end of January 2027.
References
U.S. Bureau of Economic Analysis. National Income and Product Accounts. Table 1.1.5. Gross Domestic Product. [Online Database]. Accessed 30 September 2026.
Political Calculations. Forecasting GDP Using the Climbing Limo. [Online Tool]. 10 May 2005.
Image Credit: Microsoft Copilot Designer. Prompt: "A long limousine driving up a bumpy chart showing GDP growth".
Labels: gdp forecast
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