Q4 Unemployment Rate Falls to 5.7%

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Q4 '14 Unemployment: 5.7%

Average Prediction: 5.9%

Number of Correct Forecasts: 49/462

Weakest Yen to Dollar Rate: 121 (5th Jan)

Competition Progress: 14.8% complete

The unemployment rate in the final quarter of 2014 was 5.7%, down from 6% in Q3 and 7.2% a year earlier. This is the lowest it has been since August 2008, and although the fall in unemployment appeared to stall slightly in the second half of last year (remaining at 6% from June to October), it finished strongly with a higher than expected reduction.

Our average forecast was 5.9%, reflecting an expected small improvement compared to the 6% rate at the time forecasts were being made.  Both Michael McMahon (LSE) and Kate Barker (Oxford) were slightly closer than the average, with forecasts of 5.8%, while John Llewellyn (Cambridge) was exactly on average.  This allowed Kate Barker to catch up slightly, while Michael McMahon pulled away in first place between our three Titans.

10% of our forecasts were exactly right, while just over 40% of all entries fell between 5.6% and 5.8%. However, most predictions were for higher unemployment than that, with almost 20% expecting unemployment to start rising at the end of the year.  However, the general expected trend was downwards, with the rate of decline starting to slow down as the year goes on.  So far, the labour market has outperformed expectations - will that continue into 2015?

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