Whatever the distortions and special factors, the 1% rise in GDP in the third quarter was welcome. It suggested that there has been underlying growth in the economy, not just in the third quarter but in the second as well, so that “longest double-dip recession in 50 years” should be put to bed.
The best way to look at the figures, according to the statisticians, is to take the second and third quarters together. GDP fell by 0.4% in the jubilee-affected second quarter and rose by 1% in the third, making for a 0.6% rise over the two. 0.2% of this was Olympic ticket sales, leaving 0.4% underlying growth, 0.2% in each quarter. Not strong by any measure, but the right side of zero.
The 1% GDP rise compared with expectations of a rise of between 0.4% and 0.8%. Is it a little toppy? The Office for National Statistics has pencilled in a small 0.5% fall in service sector output in September, though it doesn’t yet have the data. The 2.5% quarterly fall in construction sector output looks a bit too pessimistic.
It makes a change, however, for the ONS to produce figures that surprise on the upside. More here.
This post was originally published at David Smith’s Economics UK and is reproduced here with permission.