Economists keep underestimating the US labor market

While the recovery from the Great Recession has been slow and grinding, the unemployment rate fell much quicker than many economists expected.

According to the Economic Report of the President, since 2010 economists' consensus forecasts for the unemployment rate over the next few years have tended to be much higher than the actual rate.

The authors of the report noted that as recently as 2014, the consensus forecast predicted unemployment rates above 5% until at least 2020.

In reality, the unemployment rate fell to 5.0% in October 2015 and as of January 2016 was sitting at 4.9%.

This chart from the report shows the overly pessimistic projections:

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