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Moore Inflation Predictor Reality Check. How has it stacked up?
How the MIP measures Up |
December 15,2006
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It has been a difficult year for most Inflation predictors. Last December in the wake of hurricane Katrina and massive increases in the price of oil many prognosticators were predicting massive increases in inflation.
Our Moore Inflation Predictor© on the other hand was predicting relative level inflation with a significant drop a year into the future. Most of the others thought we were absolutely nuts. In hindsight we were amazingly accurate in a very difficult environment. One key to note is that the MIP does extremely well predicting the direction see how closely the shape of the actual is reflected in the projection. Another interesting thing to note is that by the March 2006 MIP projection (not shown) the projections for November 2006 were much closer than these so the MIP was still giving notice 8 months in advance. Interestingly the 8 month time frame is one of the MIP's most accurate periods.
Below you will see two other previous charts with the actual result added in. The next chart is one we created in March of 2004 and the last one is from October of 2004 with the reality line added showing what actually happened compared to what we projected. As you can see our projections ended up fairly close to where we projected over a 6 to 8 month period although Oil shocks skewed the interim numbers a bit. Tim McMahon, Editor
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