Use the data on U.S. and Boston unemployment, available here: Unemployment Rate (US & Boston)Download Unemployment Rate (US & Boston)

GRADED PORTION OF THE ASSIGNMENT (10 % of midterm grade):

Develop a forecast for both unemployment rate for U.S. for July 2024 and Boston for June 2024. You must test at least three different forecasting methods (no more than two iterations of a same method (e.g. you can do 3 month and 6 month Moving Average, but you must test at least one other method). Pick the one you think is the best, and explain why you picked it. Provide the forecast unemployment rate for July 2024 for the U.S. and June 2024 for Boston. Does the forecast "make sense" to you?

At the very least you should answer the following questions:

1. Which criteria you used to choose the forecast (e.g. RMSE, MAD, etc.)? How did different models perform on this criteria (i.e. report actual numbers)? What was the forecast of each model?

2. What is your final forecast based on the model(s)?

3. Do you think it is an under-estimate, over-estimate or fairly reasonable? If you think the rate would be something other than what your method produces, what is your predicted unemployment rate for each? Explain your choice.

What is your final forecast (using the model(s) and/or your subjective judgment) to two decimal points (e.g. 3.11)? Most accurate forecast (not going over the actual rate in a case of a tie) will receive a prize once the actual unemployment rates are announced by the Bureau of Labor Statistics.*

Please submit your write-up in Word or PDF and also submit the output of your modelling efforts either the Excel file, or the script (e.g. a do-file or R-script) that we can recreate your answers.

*U.S. Unemployment rate for July will be announced on August 2nd at 8:30am. To be eligible for the prize, you will have to enter your forecast no later than 15 minutes prior to the BLS announcement. You can enter your estimate here: https://forms.gle/ufDxDJBChNVVti2N7Links to an external site. Boston will likely not be announced at that time, but in August, so you should still enter it prior to 8:15am on Friday August 2nd.