The Q2 Labour Market: Good News and Bad News
Wednesday, August 13, 2014 at 10:01AM Click here for our Clash of the Titans page.
Q2 '14 Unemployment Rate: 6.4%
Average Prediction: 7.4%
Number of Correct Forecasts: 0/419
Q2 '14 Average Earnings Growth: 0.6%
Average Prediction: 1.4%
Number of Correct Forecasts: 6/419
Current S&P 500 High: 1988 (24th July)
Competition Progress: 70.4% complete
The labour market statistics for the second quarter of the year were released this morning, and they are a mix of good news and bad news. The good news is that unemployment has continued to plummet, falling to 6.4%. The bad news is that earnings growth has fallen as well, and earnings are now just 0.6% higher in nominal terms than the same period last year (which means a real fall in earnings, since Q2 inflation was 1.7%).
The unemployment rate has continued to defy our forecasters. Not a single person out of the 419 predictions we received correctly guessed 6.4% for this quarter, and only one person predicted a lower figure (6.2%). One forecast came close with 6.5%, but the majority were much higher, and the average was a whole percentage point above the outcome. Much like last quarter, our three Titans didn't do any better than the average forecaster, with Ros Altmann coming closest (she predicted 7.3%).
If people were too pessimistic about unemployment, they were also far too optimistic about earnings growth (which sums up the UK economy nicely at the moment). Six people correctly forecast a rate of 0.6%, while a further ten thought that growth would be slower. The other 403 forecasts were higher, with 350 of those over 1%. Kevin Daly was our only Titan who predicted such dire earnings growth, with a forecast of 0.5%; the other two Titans were way off (1.8% and 2.6% - higher even than the average).
The earnings figure really helped Kevin Daly secure his lead, and with 70% of the competition now complete, Kevin is beginning to look uncatchable. In the public competition, there has also been plenty of change at the top (and throughout the rest of the table).
The second estimate of GDP is due out later this week, on 15th August, and if there is any change from the preliminary estimate released last month we will update the competition then.
Click here for a summary of the results so far, or here for the full standings.