The Economists Got 2025 All Wrong

Stephen Moore on Dec 30, 2025

Well, Donald Trump has done it again! He stumped the chumps. The "chumps" in this case were the "blue-chip" academic and financial economists whose consensus forecast this time last year was of high inflation and low economic growth. Wrong on both counts.

As you've probably heard, the GDP growth for Q3 came in at a red-hot 4.3%, following 3.5% for the second quarter. Some 90% of professional economists got it wrong -- all underestimating the strength of the Trump economy. QED: These weren't random errors. These were "hate Trump" errors.

They also predicted inflation of above 3% for 2025. It's going to come in at closer to 2.7%, with the last two months trending down to the Fed inflation target of 2%.

Starting in the second quarter, GDP has been nearly twice as high as predicted.

To quote the inimitable special agent Maxwell Smart, "Missed it by that much."

This isn't the first time the whiz kids whiffed on the Trump economy. These are the same Keynesian economists who warned at the start of Trump's first term that we would see a stock market crash. The stock market is today at record highs on all three indices. Paul Krugman, who won a Nobel Prize in economics and wrote regularly for The New York Times for years, famously feared a second Great Depression if Trump policies took hold.

Krugman and others all thought Trump's tariffs would ignite runaway inflation. There's no doubt tariffs did cause a rise in aluminum, coffee and beef prices -- commodities that got hit by tariffs as high as 50%. But the economic pundits failed to take account of the disinflationary effect of pro-growth Trump policies like deregulation, tax rate cuts, and pro-America energy policies. These counteracted the impact of tariffs on prices overall.

One would have thought that the academics and media would have learned from their mistakes of always underestimating Trump on the economy. But they seem incapable of self-correcting.

The latest blue-chip forecast for economic growth for 2026 is a measly 1.9% even though the economy has been growing 50% faster than that of late.

This raises the question: Why are they persistently wrong? It could be that they are so afflicted with Trump Derangement Syndrome that they can't see or shoot straight. No one likes their theories and core beliefs proven wrong. It was John Maynard Keynes who once famously said, "When the facts change, I change my mind -- what do you do, sir?"

His disciples seem incapable of changing their minds.

If these blue-chippers had any integrity, they'd admit that they don't know what they are talking about and send their Ivy League PhDs.

Fat chance that will ever happen. Instead these prophets of doom will continue to give the entire economics profession a black eye. No wonder it is known as "the dismal science."

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Stephen Moore is a former Trump senior economic adviser and the cofounder of Unleash Prosperity, which advocates for education freedom for all children.