Even though Friday's jobs report showed that the unemployment rate improved from 9.5% to 9.4% in July, the White House said the rate would still reach 10% by the end of the year. Critics said that President Obama gave an overly pessimistic forecast so that he would look better when the actual number comes in better than his expectations. However, traders on Intrade.com are putting the odds at better than 50/50 that the rate will even be greater than 10.25% by the end of 2009. Below we highlight the contract prices (odds) for various year-end unemployment rates. As shown, the odds that the rate will be higher than 9.5% at year's end are 80%. The odds for a number higher than 10% are at 65%. While many people gave a double take when Obama projected 10% unemployment this year right after a report that showed it going from 9.5% to 9.4%, prediction markets actually think he's right on the money.
Subscribe to Bespoke Premium or Premium Plus to receive more in-depth research from Bespoke.
Comments