UK 2014 Q2 Nominal GDP
I’m a bit late with this. With the ESA10 revisions integrated into the national accounts we finally got an estimate of nominal GDP for Q2 in the Quarterly National Accounts. The usual data dump: quarter-on-quarter growth at annual rates (US-style):
ONS q/q NGDP growth rates continue to be annoyingly volatile. For the longer view of growth I’ll compare with the OBR forecasts from Budget 2014, which also shows the contrast with the old data before ESA10 revisions:
2012 does not look quite as bad as it did before. There are a number of things which are mysterious about the 2012 data – mainly the fact that real GDP goes nowhere as employment soars. Really, that data is just weird. If there was a betting market in UK GDP revisions I’d bet 2012 can get revised up further. Fast forward to 2014 and we do see nominal GDP growth at slightly above 5% y/y. That is a good place to be.
Real GDP growth also looks less bad. The Bank have been expecting upward RGDP revisions for a while, it will be interesting to see in the Inflation Report whether this matches expectations.
Prior to the revisions it was harder to make the case that the breakdown of GDP-by-income was consistent with what was happening in the labour market – not impossible, but hard. The updated series for total nominal wage and salary compensation is in fact more consistent with happened to employment (hours worked). Four quarter moving averages, growth rates:
The gap between the lines is (roughly) wage inflation: there isn’t any.