02.01.2007 5:12 pm
Economic Challenge: We have a winner
St. Louis Post-Dispatch
With Wednesday’s release of a strong GDP report, the edge definitely goes to the optimists in my annual economic forecasting contest for ‘06. I’ll announce in tomorrow’s column that the winner is Harry Niederbremer, a 70-year-old retired accountant and executive from Chesterfield. His winning forecast is below, along with those of four other strong contenders.
Interestingly, hardly anyone was optimistic enough about the stock market going into 2006. Thirty-four of 37 entries guessed too low a figure for the year-end Dow Jones industrial average, and some were much too low. The average forecast was for a Dow of 11,452, which proved to be more than 1,000 points too low. A majority of contestants also were too high on the inflation number and the unemployment number, and too low on GDP.
For 2007, the average contest participant is predicting a modest 5 percent increase in the Dow (to 13,056), a slowdown in GDP growth to 2.5%, a slight uptick in unemployment (4.8 percent) and stable inflation (2.5%). It’s been my experience that the consensus is always wrong on at least one of those variables, and that the winner usually is someone who’s willing to go against the grain.
Here’s a summary of some readers who were pretty prescient as 2006 began:
The top five forecasts
| GDP | Jobless | CPI | Dow | |
| Forecaster | growth | rate | increase | industrials |
| Harry Niederbremer | 3.3% | 4.8% | 2.4% | 11,625 |
| sportsgarru | 3.4% | 5.0% | 2.4% | 11,950 |
| John Tabash | 3.4% | 4.9% | 2.2% | 11,750 |
| coachjfr | 3.3% | 5.1% | 2.3% | 12,150 |
| Wallie Breig | 3.6% | 4.9% | 2.8% | 12,888 |
| ACTUAL | 3.4% | 4.5% | 2.5% | 12,463 |
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David Nicklaus has covered St. Louis business for more than 25 years. His column appears three days a week on the Post-Dispatch business page. 
