Be DEFT. Enter My Derby of Economic Forecasting Talent.
Posted: March 02, 2026
February 23, 2026 (Maple Hill Syndicate) –- The shrinking middle class worries the winner of my 20th annual Derby of Economic Forecasting Talent (DEFT).
“The distance between the haves and have-nots seems to be growing,” Arlis Swartzendruber says. The percentage of people in the middle class “has shrunk since 1971.”
Swartzendruber, who is retired, lives in Mesquite, Nevada, and was formerly superintendent of schools in Waterloo, Iowa.
In the Derby, contestants predict six economic variables, such as the inflation rate and the price of oil. Rules for the contest are at the end of this column.
Due to the government shutdown, scoring for the 2025-2026 contest involves only five of the six variables. Due to the government shutdown in October-November 2025, we don’t yet know how much the U.S. gross domestic product grew during 2025.
Swartzendruber came close in three of the five categories. No other contestant scored points in more than one category.
Despite his concerns about the wealth gap, Swartzendruber is optimistic long term, citing the book The Fourth Turning by Wiliam Strauss and Neil Howe. It says that every fourth generation produces a profound shift in society.
“I’m 86,” he says. “I’ve lived long enough to see the characteristics of each generation. I have a lot of faith in the next generation of politicians that will be coming along.”
Oil Gushed
Three people tied for second place in the Derby, each with a prescient guess on one of the six variables.
Greg Dunn, a retiree in Pittsburgh, Pennsylvania, came close to guessing the price of a barrel of oil at year-end 2025. He guessed $56; it was $57.97.
At the end of 2024, oil was just above $70 a barrel. What led Dunn to predict that the price would go down? “I really thought there would be a lot of supply,” he says.
He was correct, as U.S. oil-and-gas production hit a record in 2025, pushing the oil price downward. For the rest of this year, Dunn expects an improving economy, with inflation subdued and the job market reviving.
Interest Rates
Tom Powers, a senior vice president of investments at Moors & Cabot in Boston, Massachusetts, earned his share of the silver medal with a good guess on interest rates. Powers guessed 4.20% for 10-year notes at year-end 2025. The actual rate was 4.18%.
He expects a good economy in the rest of 2026, helped partly by artificial intelligence. “We’ve started to use AI,” he says. “It cuts down the time that projects require.”
Imported Butter
Brian Strait, a retiree in Las Vegas, Nevada, got his points by nailing the figure for U.S. retail sales in December 2025. It was $735 billion, exactly as Strait predicted and about $25 billion less than the year before.
Before retiring, Strait spent three decades in the ski industry and 11 years as an importer and distributor of specialty foods. Importing butter from France gave him a taste of dealing with tariffs, and he doesn’t like them.
“Consumers bear the cost,” he says. “Importers are not eating that cost. They can’t afford to.”
You Can Play
Thirty-six people entered the Derby a year ago. Want to show your predictive prowess? Enter my 2026-2027 DEFT Contest.
To enter, answer the six questions below. Email your entry to jdorfman@dorfmanvalue.com, or mail it to John Dorfman, Dorfman Value Investments, 101 Federal Street, Suite 1900, Boston MA 02110. Entries must be sent by March 15, 2026.
Please provide:
- Your name
- Address
- Phone, weekday and weekend if different
- Email address
- Occupation
You aren’t required to state the reasons behind your forecasts, but I appreciate it if you do.
Here are the questions.
- Estimate the growth in U.S. gross domestic product (GDP) in 2026. The figure for 2024 was 2.8%. We don’t have a figure yet for 2025, thanks to a government shutdown in October and November. GDP was rising at a 4.4% pace in the third quarter.
- Consumer prices rose 2.7% in 2025, as measured by the Consumer Price Index (CPI). What will be the rate of inflation in 2026?
- Ten-year government bonds paid 4.18% annual interest as of December 31, 2025. What will be the interest rate at the close of 2026?
- A barrel of West Texas Intermediate crude oil cost $57.97 as 2025 drew to a close. At the end of 2026, what will the oil price be?
- Retail sales in the month of December 2025 totaled $735 billion. What will be the comparable figure for December 2026?
- The unemployment rate was 4.4% at the end of 2025. What will it be at the end of 2026?
John Dorfman is chairman of Dorfman Value Investments LLC in Boston, Massachusetts. He or his clients may own or trade securities discussed in this column. He can be reached at jdorfman@dorfmanvalue.com.