Unemployment Remains at 7.8%

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Q2 '13 Unemployment: 7.8%

Average Prediction: 8.0%

Number of Correct Forecasts: 28/310

Current Greek Bond Yield Low: 8.13 (22nd May)

The unemployment rate for the second quarter of 2013 was announced today to be 7.8% for the fourth consecutive quarter, despite forecasts suggesting it would be nearer 8%.  The actual number of unemployed people is down by around 5,000 people compared to last quarter.

LSE's Ethan Ilzetzki was once again the closest out of the three professors in the competition, with an optimistic prediction of 7.4%.  Oxford's Linda Yueh was next with 8.3%, which helped push her in to second place ahead of Cambridge's Michael Kitson, who was overly pessimistic with a forecast of 8.8%.  This means that with three quarters of the competition completed, Professor Ilzetzki is firmly in the lead and it looks unlikely that either of the other two can now catch him.

Our average forecast was 8% again this quarter (the same as last quarter), but only 28 forecasters correctly predicted a rate of 7.8% (down from 39 last quarter).  However, 26% of entrants thought the unemployment rate would lie between 7.7% and 7.9%, while 22% thought it would be lower and 52% thought it would be higher at this stage.  This matches the general mood of our forecasters back in December, who have been consistently too negative about the UK economic recovery that we've seen since then.

At the end of next week (on the 23rd August) we will find out if the previous GDP figure of 0.6% is going to be revised at all.  In previous quarters, GDP has not been revised from the initial estimate, but with unexpectedly high manufacturing figures released this month, there is every chance that it may be this time.

Click here for a summary of the results so far, or here for the full standings.