Friday, July 24, 2009
Second quarter GDP drops 0.8%
Posted by David Smith at 09:45 AM
Category: Thoughts and responses

The good news about the second quarter gross domestic product figures was that the quarterly fall, 0.8%, was only a third of that in the first quarter. The bad news was that it was twice what analysts expected. Some even hoped for a positive surprise, a flat or even a slight rise in GDP.

Something has broken down in the relationship between the GDP numbers and the surveys. The normally reliable National Institute, which bases its monthly GDP calculations on available public information, expected a drop of only 0.4%. The Office for National Statistics is consistently coming up with gloomier GDP data than other evidence would have suggested.

More details here of a broad-based decline in second quarter output.