3 ms·

Weird. It's a technical recession (GDP falling two quarters in a row). Yet unemployment has dropped to 3.8% [0] and real-terms wages are still going up [1]. I

by cal85 3y ago

Weird. It's a technical recession (GDP falling two quarters in a row). Yet unemployment has dropped to 3.8% [0] and real-terms wages are still going up [1]. I feel those figures are a better indicator for economic health than GDP growth, which seems to be a fairly loose measurement. But it is still weird that GDP growth tells such a different story. [0] https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/unemployment https://www.ons.gov.uk/employmentandlabourmarket/peoplenotin... [1] https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/averageweeklyearningsingreatbritain/latest https://www.ons.gov.uk/employmentandlabourmarket/peopleinwor...

TheOtherHobbes 3y ago
It's nice to finally see some wage increases, but most people are worse off than they were in 2010. https://www.resolutionfoundation.org/publications/are-you-better-off-today/ https://www.resolutionfoundation.org/publications/are-you-be... The figures hide the fact that most of the population can't afford to buy a property, and the cost of renting - which is not included in inflation figures - has hugely outstripped income.
- cal85 3y ago
  The situation with homeownership and rent is undoubtedly much worse compared to generations past, as that article argues. But that's looking at changes over a decades timescale, during which the economy has gone through many periods of growing and shrinking. That's a socio-economic shift over generations - very interesting, but not really relevant to the question of whether we're in a recession/downturn right now, which is about whether things are currently getting better or worse, quarter to quarter.
- OJFord 3y ago
  What measure are you using to say worse off if real terms wages are up as GP said? Or are you disputing that? (It did surprise me.)
monkeydust 3y ago
Yea you do start to wonder if we're measuring the wrong thing
mytailorisrich 3y ago
"Inactivity" has increased a lot since Covid. People classed as "inactive" do not work but are not counted in unemployment numbers. The population growth rate has also been higher than GDP growth so even when GDP was fantastically growing by 0.3%, it was actually dropping per capita. GDP is a good metric to tell how the economy is going, but many numbers can be fudged and GDP growth does not mean people are better off per capita. > Annual growth in regular earnings (excluding bonuses) was 6.2% in October to December 2023 RPI over 2023 was about 10% so salaries are not exactly growing across the board...
- cal85 3y ago
  Are you sure? I just looked at ‘inactive’ data. [0] It was ~8.6 million at the start of 2020, and ~9.2 million at end of 2023. That doesn’t seem like a big jump, in fact zoomed out to ten years the pandemic doesn’t even really jump out at all. (Which surprises me.) There certainly doesn’t seem to be any significant change over the last 2 quarters. Unless I am reading it wrong somehow? You’re right about GDP growth per capita being down (for something like 7 successive quarters, I heard on the radio), and that’s normally the figure considered to best represent living standards. But as you say that’s explainable by population growth, which means it doesn’t count. If it’s new babies being born then economically speaking that’s an investment in the future and clearly doesn’t count as a falling living standards. And if it’s immigration, then I would guess those new people are mostly better off than they were before (or they wouldn’t have migrated), meaning it doesn’t necessarily reflect living standards falling either for people born here or for recent immigrants. So my armchair analysis is still that the economy is at worst stagnant, and clearly not in recession. Which is actually kind of remarkable given the feeling I get from the news over the last few years of crisis after crisis (pandemic, Ukraine, energy crisis). [0] https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/economicinactivity/timeseries/lf2m/lms https://www.ons.gov.uk/employmentandlabourmarket/peoplenotin...
  - mytailorisrich 3y ago
    > It was ~8.6 million at the start of 2020, and ~9.2 million at end of 2023. So 700,000 people just like that in 4 years. That's quite a lot. Considering that the unemployment rate of 3.8% corresponds to 1,320,000 people, 700k extra would make a big difference to the unemployment rate (which would be 5.8% if those 700k they were counted as "unempployed"). And of course there are the criteria for being "employed". If you are on part-time or zero-hours contract, your hours and thus income can significantly decrease but you're still "employed". So would be interesting to see data on that if there are. > But as you say that’s explainable by population growth, which means it doesn’t count Of course it counts. And of course it means that average living standards are falling. Overall people are producing less per capita on average. So either there is a recession across the board that is masked by the population increase or the new immigrants fill new jobs that are much less productive, which isn't good, either in a country that has a productivity problem. > And if it’s immigration, then I would guess those new people are mostly better off than they were before That's irrelevant. It's the situation in the UK that matters.
nvm0n2 3y ago
[dead]
tim333 3y ago
Anecdotally in London a lot of work was done by enthusiastic young workers coming in from the EU. Now they've been largely banned by the glory that is brexit, businesses seem to have both staff shortages and less business.

by cal85 3y ago

TheOtherHobbes 3y ago

It's nice to finally see some wage increases, but most people are worse off than they were in 2010. https://www.resolutionfoundation.org/publications/are-you-better-off-today/ https://www.resolutionfoundation.org/publications/are-you-be... The figures hide the fact that most of the population can't afford to buy a property, and the cost of renting - which is not included in inflation figures - has hugely outstripped income.

cal85 3y ago
The situation with homeownership and rent is undoubtedly much worse compared to generations past, as that article argues. But that's looking at changes over a decades timescale, during which the economy has gone through many periods of growing and shrinking. That's a socio-economic shift over generations - very interesting, but not really relevant to the question of whether we're in a recession/downturn right now, which is about whether things are currently getting better or worse, quarter to quarter.
OJFord 3y ago
What measure are you using to say worse off if real terms wages are up as GP said? Or are you disputing that? (It did surprise me.)

monkeydust 3y ago

Yea you do start to wonder if we're measuring the wrong thing

mytailorisrich 3y ago

"Inactivity" has increased a lot since Covid. People classed as "inactive" do not work but are not counted in unemployment numbers. The population growth rate has also been higher than GDP growth so even when GDP was fantastically growing by 0.3%, it was actually dropping per capita. GDP is a good metric to tell how the economy is going, but many numbers can be fudged and GDP growth does not mean people are better off per capita. > Annual growth in regular earnings (excluding bonuses) was 6.2% in October to December 2023 RPI over 2023 was about 10% so salaries are not exactly growing across the board...

cal85 3y ago
Are you sure? I just looked at ‘inactive’ data. [0] It was ~8.6 million at the start of 2020, and ~9.2 million at end of 2023. That doesn’t seem like a big jump, in fact zoomed out to ten years the pandemic doesn’t even really jump out at all. (Which surprises me.) There certainly doesn’t seem to be any significant change over the last 2 quarters. Unless I am reading it wrong somehow? You’re right about GDP growth per capita being down (for something like 7 successive quarters, I heard on the radio), and that’s normally the figure considered to best represent living standards. But as you say that’s explainable by population growth, which means it doesn’t count. If it’s new babies being born then economically speaking that’s an investment in the future and clearly doesn’t count as a falling living standards. And if it’s immigration, then I would guess those new people are mostly better off than they were before (or they wouldn’t have migrated), meaning it doesn’t necessarily reflect living standards falling either for people born here or for recent immigrants. So my armchair analysis is still that the economy is at worst stagnant, and clearly not in recession. Which is actually kind of remarkable given the feeling I get from the news over the last few years of crisis after crisis (pandemic, Ukraine, energy crisis). [0] https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/economicinactivity/timeseries/lf2m/lms https://www.ons.gov.uk/employmentandlabourmarket/peoplenotin...
- mytailorisrich 3y ago
  > It was ~8.6 million at the start of 2020, and ~9.2 million at end of 2023. So 700,000 people just like that in 4 years. That's quite a lot. Considering that the unemployment rate of 3.8% corresponds to 1,320,000 people, 700k extra would make a big difference to the unemployment rate (which would be 5.8% if those 700k they were counted as "unempployed"). And of course there are the criteria for being "employed". If you are on part-time or zero-hours contract, your hours and thus income can significantly decrease but you're still "employed". So would be interesting to see data on that if there are. > But as you say that’s explainable by population growth, which means it doesn’t count Of course it counts. And of course it means that average living standards are falling. Overall people are producing less per capita on average. So either there is a recession across the board that is masked by the population increase or the new immigrants fill new jobs that are much less productive, which isn't good, either in a country that has a productivity problem. > And if it’s immigration, then I would guess those new people are mostly better off than they were before That's irrelevant. It's the situation in the UK that matters.

nvm0n2 3y ago

[dead]

tim333 3y ago

Anecdotally in London a lot of work was done by enthusiastic young workers coming in from the EU. Now they've been largely banned by the glory that is brexit, businesses seem to have both staff shortages and less business.