NOAA’s Hurricane Forecast More Often Wrong Than Right

NOAA announced its 2010 Hurricane forecast today catching markets off-guard with an expectation of 8 to 14 Hurricanes during this year’s season–much higher than average.  The forecast caused natural gas futures to close higher after falling earlier in the day due to inventory data.  While the implication of this forecast can’t be ignored, NOAA has a surprisingly checkered past in predicting Hurricane seasons.  Historical data shows that NOAA’s  forecast has been  accurate in just 2 of the past 9 years.  According to NOAA’s website, “The seasonal activity is expected to fall within these ranges in 7 out of 10 seasons.”  This is clearly not the case (see chart):