UK 2013 Nominal GDP
The ONS published the first nominal GDP figure for 2013 Q4 this week, and so we have calendar 2013 too. Quarterly nominal growth rates continue to be erratic with revisions appearing to move nominal growth around between quarters; so I think we should not to put too much emphasis on the quarterly growth rates. However, the good news is that NGDP growth has picked up to 4.5% over the year to Q4, from a sub-2% low in the second half of 2012.
Here are the annual growth rates for the last six years, nominal, real and deflator growth, with nominal GVA at basic prices (and deflator) included to show the distortions from indirect tax changes:
This graph shows year-on-year quarterly growth:
Contrary indicators do remain for the “strong nominal growth revival” thesis: growth of nominal imports is fairly slow (2.4% ex oil over 12 months to Q4), as is growth of income tax receipts (OBR says 3.2% ex special factors), and the labour market slowed a little in December, though the LFS monthly sampling effects may distort this.
On that last point, Ben Chu tweeted a good chart showing how unemployment has changed for each of the three cohorts surveyed; the headline unemployment rate being a rolling 3m average. The fall in the headline rate is driven by two of the cohorts seeing a 0.6% and 0.7% fall in unemployment over just three months to October and November respectively. Which seems almost too good to be true. The collapse in the claimant count is perhaps the most convincing reason to believe that the labour market really is doing so well.
Looking forward, the ECFIN ESI confidence indicator rose in February to its highest level since 1989. Should we call it the Carney boom… or the Osborne boom? You decide. But where is that 4%+ output growth?