GDP Growth Announcement

Every three months or so, the Office for National Statistics releases the numbers for Gross Domestic Product (GDP) for the previous quarter (three month period). Today it released its first estimate of what GDP was for the UK in 2010Q3 (the third quarter of 2010) which is based on about a quarter of all the information available to them.

Next term we'll talk quite a bit about GDP but the BBC's economics section has quite a nice description of it if you're not familiar.

In 2010Q2 the UK economy grew by 1.2% which was surprisingly high, but it is often the case that as an economy starts to emerge from a recession that it grows strongly. Growth in 2010Q3 was expected to be much slower with many pundits expecting about 0.4%. Today though that number came in at 0.8%. It means that for 2010 as a whole, growth is likely to be just shy of 2%.

Does this mean the economy is up and running and all is well? As the BBC article makes clear however, there are other reasons to be a little bit pessimistic about future growth: Retail sales fell in September, and house prices are falling (these are seen as a barometer of economic activity). Furthermore, the impact of the Coalition government's steep spending cuts will start to take effect soon, something else that is likely to depress future growth.

Unemployment Numbers

Another in the long list of things we'll look into next term in econ101b is Unemployment - joblessness. Unemployment almost always refers to workers out of work, although others have talked about unemployed houses recently, amongst other things.

But we usually think about workers being unemployed - not employed, not put to work. Every month the UK statistical agency reports unemployment figures for the UK and they are usually pored over with great interest, particularly in times like the current (will we have a double dip? Can we blame the Tories yet?) ones. Apparently the number of people being employed (hence leaving the state of unemployment) increased by nearly 200,000 this last month.

This would seem to be great news, but as Stumbling and Mumbling points out, things ain't always as they seem. Most of all, the numbers of people becoming employed are not necessarily coming from the pool of unemployed workers. Many other things are possible: People who were not previously actively seeking work (hence not counted as unemployed, e.g. mothers returning to the workforce after raising kids or the retired) may have taken jobs, or immigrants may have taken jobs in the UK (not likely at the moment thanks to the incoming government's arbitrary caps).

The bottom line is: Much of these numbers are people becoming self-employed or taking part-time work. In fact, full time employment has fallen in these latest released numbers.

It most certainly isn't a particularly encouraging story about UK Plc...