Uk 1q gdp drop largest quarterly decline since 1958

System

Aha, I think I found it:

Only trouble is, your then attacked as a negative bear! We could have 0.01% better results, and recession over.

Thats where you first got confused. mitchaa misread it and posted this;

Even i agree with you there Graham, it seems ludicrous to me that a 0.01% growth can signal the official end of a recession.

Bold to highlight where people got mixed up

Graham_Devon

Joeskeppi wrote: »

Aha, I think I found it:



Thats where you first got confused. mitchaa misread it and posted this;




Bold to highlight where people got mixed up

It's not just there, and you can see I was saying "better results" to try and highlight my question.

It's also here:

If GDP is revised to -2.2%, and we got another 0.1% growth in May, that means we would be "growing" at -1.8%.

Have I got this right? In other words, negative growth would mean growth?

I was posting along the lines that I didn't think anyone could possibly suggest that anyone was assuming we would have positive growth, i.e. above 0.0% the quarter after -1.9% falls.

Yes. i'm completely befuddled. May have made a t!t out of myself, but I asked the questions which no one disagreed with?

System

To be quite honest I didn't understand that original question at all.

kennyboy66_2

Graham_Devon wrote: »

After re-reading the thread, in which everyone agreed, it looks like people are talking about two different things.

Kenny for example says positive growth. Mitchaa states negative growth, just less negative than the previous quarter. Someone else says that IS growth, i.e. -2.1% one month, and -1.9% the next = 0.2% postive growth.

Kenny then says thats the rules, and generali does too.

So thats where I was confused. Does quarter 1 at -2.4 and quarter 2 at 1.9 mean 0.5% growth? The telegraph seems to concur.

That's the key to this whole thing and re-reading the thread it looks like everyone is looking at it different but stating thats correct to the first post? I.e it would be 0.5% growth (as you have to grow from the bottom) and therefore end of the recession.

If I could get this cleared up it will really help!!

Its probably best to ignore monthly numbers (and mitchaa perhaps) as this might confuse things.

You really need to treat each Quarter as a discrete number.

Q1 at -2.4% and Q2 at -1.9% means that the economy is contracting in both quarters, but its contracting at not quite the same pace.

To be honest something like 1.9% fall is pretty sharp and it ain't much comfort to say that its not quite as bad as 2.4%.

To calculate the annual fall, you can add up the 4 relevant quarters (while not exactly correct mathmatically it will suffice)

To stretch an anology further, its the difference between hitting your brakes hard or hitting them a bit more gently. You are still slowing down.

JonnyBravo

Graham_Devon wrote: »

After re-reading the thread, in which everyone agreed, it looks like people are talking about two different things.

Kenny for example says positive growth. Mitchaa states negative growth, just less negative than the previous quarter. Someone else says that IS growth, i.e. -2.1% one month, and -1.9% the next = 0.2% postive growth.

Kenny then says thats the rules, and generali does too.

So thats where I was confused. Does quarter 1 at -2.4 and quarter 2 at 1.9 mean 0.5% growth? The telegraph seems to concur.

That's the key to this whole thing and re-reading the thread it looks like everyone is looking at it different but stating thats correct to the first post? I.e it would be 0.5% growth (as you have to grow from the bottom) and therefore end of the recession.

If I could get this cleared up it will really help!!

No. Why are you assuming it is a running tally? Does it do that on eg house prices??

On the quarterly figures that second minus figure (the -1.9% in your example) is then from the new starting point of where you were after the first drop. ie it is a drop of another -1.9% from the new lower starting point. It is not a growth of 0.5%.

You need an absolute growth to leave recession, no matter how small and then would need another 2 quarters of negative figures to re-enter recession officially.
In other words it's easier to leave recession than enter it. Good eh?

I have to say I'm not sure how you read what you read into that thread, but you did. Hope it's clearer now.

ruggedtoast

Anyway, back to the topic before I start doubting my previously firm belief that I knew what a minus meant - this fall is jolly large isnt it chaps.

I should think that fellow Brown will have to do something what?

Pull a rabbit out of the hat rather?

Graham_Devon

kennyboy66 wrote: »

Its probably best to ignore monthly numbers (and mitchaa perhaps) as this might confuse things.

You really need to treat each Quarter as a discrete number.

Q1 at -2.4% and Q2 at -1.9% means that the economy is contracting in both quarters, but its contracting at not quite the same pace.

To be honest something like 1.9% fall is pretty sharp and it ain't much comfort to say that its not quite as bad as 2.4%.

To calculate the annual fall, you can add up the 4 relevant quarters (while not exactly correct mathmatically it will suffice)

To stretch an anology further, its the difference between hitting your brakes hard or hitting them a bit more gently. You are still slowing down.

Thanks, but would that mean "growth". I.e. 0.5% growth between the quarters.

I keep saying I'm here to learn, and I am. I'm not a landlord, dont do shares, but want to in the future, so need to learn. Seems different people call different things growth.

To me, it doesnt mean growth, just means less of a fall? But know that some others DO regard that as growth.

Graham_Devon

JonnyBravo wrote: »

No. Why are you assuming it is a running tally? Does it do that on eg house prices??

On the quarterly figures that second minus figure (the -1.9% in your example) is then from the new starting point of where you were after the first drop. ie it is a drop of another -1.9% from the new lower starting point. It is not a growth of 0.5%.

You need an absolute growth to leave recession, no matter how small and then would need another 2 quarters of negative figures to re-enter recession officially.
In other words it's easier to leave recession than enter it. Good eh?

I have to say I'm not sure how you read what you read into that thread, but you did. Hope it's clearer now.

Much clearer, thankyou.

Can now see why I looked like sich a d!ck.

I didn't know each quarter was measured froma 0.0% baseline for instance. The way I have read other posts on the subject, it's indicated it's a rolling measure, like inflation in a way.

System

JonnyBravo wrote: »

No. Why are you assuming it is a running tally? Does it do that on eg house prices??

Ahhhh, that's what's going on!

kennyboy66_2

Graham_Devon wrote: »

I was posting along the lines that I didn't think anyone could possibly suggest that anyone was assuming we would have positive growth, i.e. above 0.0% the quarter after -1.9% falls.

Yes. i'm completely befuddled. May have made a t!t out of myself, but I asked the questions which no one disagreed with?

Ok, I think I understand your confusion.
Lets start the GDP index at 1000 units on Jan 1st 2009 & look at what Mitchaa was hoping for.

Q1 = -2.4% our GDP is now only 976 units (1000 x (1-0.024)
Q2 = +0.1% our GDP is now 977 units (976 x 1.001)

We would be technically out of recession, even though the growth (contraction) for the year to date (ie Q1 & Q2 cummulative) is -2.23% .

In fact it seem almost certain that the UK total GDP will remain below what it was at the beginning of 2008 for a good few years.