Terry Johnson, the winner of my Derby of Economic Forecasting Talent (DEFT) for 2024, likes to count trucks.
Specifically, he counts the number of big trucks – 18-wheelers and the like – on a 45-mile stretch between Lincoln and York, Nebraska. More trucks means the economy is doing well. Fewer trucks is an economic danger sign.
“Last year I counted 329 trucks, by far the most I ever counted,” Johnson said. “Didn’t look like a recession in the near future to me.”
Johnson, a retired sales rep for General Mills, beat out 43 other contestants to win the DEFT contest, which is held annually. He had the best guess on the U.S. unemployment rate, and one of the best guesses on interest rates.
Looking ahead, Johnson predicts that 2025 will be “pretty flat,” after which he thinks the economy will do well, thanks to lower taxes and reduced regulation.
Would you like to try your hand at predicting the economy? The contest is open to all. Over the years, both financial professions and amateurs have done well.
How to Enter
To enter, answer the six questions below. Send your entry to me at jdorfman@dorfmanvalue.com, or John Dorfman, Dorfman Value Investments, 101 Federal Street, Suite 1900, Boston MA 02110. Entries must be postmarked or time-stamped by midnight, March 15, 2025.
Please provide:
- Your name
- Address
- Phone (please include a weekend phone number)
- Email address
- Occupation
You aren’t required to state the reasons behind your forecasts, but I am grateful if you do.
Here are the questions.
- The U.S. economy grew 2.8% in 2023. How much will the gross domestic product (GDP) grow or shrink in 2025?
- Inflation, as measured by the Consumer Price Index, was 2.9% in 2024. What will inflation be this year?
- The interest rate on 10-year U.S. government bonds started 2024 at 3.88% and rose to 4.39%. What will it be as of the end of 2025?
- The price of crude oil (West Texas Intermediate) fell more than $5 a barrel in 2024, ending in $70.15. What will the oil price be on Dec. 31, 2025?
- U.S. retail sales (including food) for the month of December 2024 were $730.3 billion. That was increase of about $24 billion from the prior December. What will retail sales total in December 2025?
- Unemployment rose in 2024, to 4.1% from 3.7%. What will the unemployment rate be as of December 2025?
Digman’s Return
Les Digman, a retired professor of business strategy at University of Nebraska, captured second place. He had tied for first in the 2020 DEFT contest, and says his plaque from that victory hands “in a prominent place” in his home.
Digman won the silver medal mostly because of an accurate guess on the price of oil. He also got some points for his estimate of GDP.
“I’m not a fan of tariffs,” Digman says. “I think they will be an upward force on prices.” That, in turn, could make the Federal Reserve less willing to cut interest rates.
He’s also a bit concerned about the layoffs of federal employees. “With all these government layoffs and everything, if people start pulling back, it’s hard to tell what will happen,” he says.
Jacobi Repeats
Jerry Jacobi, a physical therapist, won third place in the derby, repeating his finish from four years ago. A winning guess on retail sales was the biggest reason for his success.
Jacobi’s biggest worry is high interest rates. “I think we’re stuck with these high rates for a while,” he says. “The Fed is likely to be in a holding pattern because of uncertainty.”
“I wouldn’t want to be Jerome Powell (the head of the Federal Reserve),” Jacobi said. “He’s in a tricky spot” because of uncertainty about tariffs and other aspects of the economy.
Jacobi doesn’t expect a recession in 2025. “If there is one,” he adds, “it will probably be quick and the recovery strong” as happened under President Ronald Reagan.
Nebraska Triumphs
Johnson and Jacobi are both from Omaha, Nebraska. Digman lives in Lincoln, Nebraska. So the winners in this year’s contest were all Nebraskans.
That happened even though 30 of the 44 contestants were from other places. There were entries from Florida, Nevada, New York, Pennsylvania, Texas and Virginia. Two entries were from Canada and one from Italy.
Nebraska had also swept the honors in the 2020 contest. And of course it’s the home of Warren Buffett, the country’s most celebrated investor. It makes me want to spend more time in and around Omaha.
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