Economic forum what's new
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  • income provides only a partial view of the economic resources available to households to support consumption. What is happening to their wealth is also important in assessing whether current consumption is sustainableshows household wealth on this basis in real terms, using the GDP deflator to correct for changes in the price level. The figure shows that there was an increase in household wealth from 1997 to 2007, driven mainly by rising house prices. However, the onset of the recession in 2008 saw the net worth of household dropped significantly, but in 2012 it recovered and was almost at the pre-crises level

Economic forum what's new Presentation Transcript

  • 1. What’s new Peter Patterson, Deputy Chief Economic Adviser ONS Economic Forum 7 April 2014 1
  • 2. What’s new • 2010 input-output analytical tables • Compendium of UK statistics – covering four countries of the UK • Updated GDP revisions article - including expenditure components • Article on recent changes to estimates of business investment 2
  • 3. GDP and productivity trends 3 70.0 75.0 80.0 85.0 90.0 95.0 100.0 105.0 1997 Q1 1999 Q1 2001 Q1 2003 Q1 2005 Q1 2007 Q1 2009 Q1 2011 Q1 2013 Q1 GDP Output/Hour Hours Index nos, 2008Q1=100
  • 4. Contributions to productivity changes 4 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 Allocation Effect Agric., & Non-Manuf. Prod. Manufacturing Financial Services Other Services Construction Total Contributions to change in output per hour since 2008Q1, % points
  • 5. Dispersion in estimates of GDP growth 5 96.0 98.0 100.0 102.0 104.0 106.0 108.0 Average Expenditure Income Output Real GDP, index nos, 2010=100
  • 6. Manufacturing output and hours 6 80 90 100 110 120 130 140 150 160 170 180 1997Q1 Q3 1998Q1 Q3 1999Q1 Q3 2000Q1 Q3 2001Q1 Q3 2002Q1 Q3 2003Q1 Q3 2004Q1 Q3 2005Q1 Q3 2006Q1 Q3 2007Q1 Q3 2008Q1 Q3 2009Q1 Q3 2010Q1 Q3 2011Q1 Q3 2012Q1 Q3 2013Q1 Q3 Output Hours Index nos, 2010=100
  • 7. Sectoral balances 7 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 Corporations Government Household & NPISH ROW
  • 8. Current account balance 8 -6 -5 -4 -3 -2 -1 0 1 2 3 4 1997 Q1 1999 Q1 2001 Q1 2003 Q1 2005 Q1 2007 Q1 2009 Q1 2011 Q1 2013 Q1 Current account Goods & services Income Transfers % of GDP
  • 9. Inflation and earnings growth 9 -6 -4 -2 0 2 4 6 Feb 2014 Nov-Jan 2013 Nov-Jan 2012 Nov-Jan 2011 Nov-Jan 2010 Nov-Jan 2009 Per cent changes on a year earlier Public sector Total pay whole economy Consumer Prices Index Private sector
  • 10. Goods and services inflation 10 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 1994 Jan 1996 Jan 1998 Jan 2000 Jan 2002 Jan 2004 Jan 2006 Jan 2008 Jan 2010 Jan 2012 Jan 2014 Jan Goods Services CPI, % changes on a year earlier
  • 11. Business investment price deflators 11 65 75 85 95 105 115 125 135 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Business investment Transport equipment (13%) Other machinery and equipment (38%) Other buildings and structures (29%) Intangible assets (20%) 2005=100
  • 12. Self-employment (% of total) 12 11.0 11.5 12.0 12.5 13.0 13.5 14.0 14.5 15.0 1993 Q1 1995 Q1 1997 Q1 1999 Q1 2001 Q1 2003 Q1 2005 Q1 2007 Q1 2009 Q1 2011 Q1 2013 Q1
  • 13. How do we measure unemployment? Labour Force Survey: • c. 42,000 households equates to around 100,000 individuals every quarter • Random sample, stratified by postcode • Representative of the whole UK population • Each case weighted by age, sex and geography • 60 million people  100,000 = 600 (average weight) • Therefore each interview is equivalent to 600 people • Complete sample over three months 13
  • 14. How does the LFS sampling work? Jan Feb Mar Apr May Jun Jul Aug Sep Jan-Mar Apr-Jun Feb-Apr May-Jul 80 % of the same people 14
  • 15. Single month estimates • Based on one month’s sample • Weighted separately • Seasonally adjusted • Benchmarked to three-month estimates • But… Greater sampling variability Can reflect characteristics of sample in a particular month 15
  • 16. Single month unemployment 16
  • 17. LFS NSQR recommendations – single month • As an improvement to the currently published single month estimates, a new weighting methodology based on that used for the quarterly estimates be developed • The minor modifications identified by the review be applied to the seasonal adjustment of the single month estimates and that they be subject to more regular review in accordance with the ONS standard seasonal adjustment review • Continue with the current single month estimates benchmarking method, unless superseded by developments in the weighting • The single month estimates metadata be improved • The existing project to develop state space models be continued with a higher level of priority than that which is currently being applied 17
  • 18. Real Household Wealth (2010 prices) 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 £ Billions Residential wealth Other non-financial assets Net financial assets
  • 19. Key Findings • GDP recovered substantially from the falls in recent years, but GDP per capita has only recovered a little • Real net national disposable income per capita has continued to fall gently • Real adjusted household disposable income per capita held up well during the deepest phase of the recession but has been falling gently in the subsequent period • Median household income and real household income have grown broadly in line with each other in recent years, suggesting no major distributional factors
  • 20. Way forward • Regular publication of additional measures • Continue to develop and refine additional measures (eg natural capital, human capital) • Update the ‘dashboard’ accordingly • Update the Household Satellite Accounts