Getting it wrong while setting it right

Over the weekend there were several articles in the media making some of the points about the UK economy that I advanced in my previous post about the "jobful recession".  There seems to be widespread agreement that if the data are showing solid employment growth while the economy is supposedly shrinking, then it's most likely the GDP data that are wrong.  Nobody quite seems to know why, though there's a general feeling that the ONS publishes its estimates much too early, and by the time it gets around to revising them to incorporate more complete and accurate information, nobody's paying attention any more.  

The first estimate of UK second quarter GDP growth will be released on Wednesday -- just 25 days after the end of the period in question.  The consensus among City experts is that the data will show a third consecutive quarter of decline, by something like 0.2%.  Given that nobody trusts the data, you might hope that the figures would be largely ignored by the media, but you know that's not going to happen, don't you? There will be the usual alarmist handwringing about the prolongation of the double-dip recession, and all the good news about employment will be completely forgotten.

Last week in the Independent, Hamish McRae attempted to downplay the importance of the early GDP estimates by pointing out the scale of the revisions that subsequently take place.  He reported that thanks to recent revisions to growth data going all the way back to the 1970s (!), the UK economy had been  significantly larger than previously thought when the financial crisis hit; it did not contract as far as had been estimated as a result of the crisis; and as a result,  real GDP is now about 4% larger than previously thought.

So that's all good, then -- well done Hamish!  But not so well done to his sub-editor, who headed the article with the entirely incorrect statement that "Our economy is now around 4 per cent bigger than it was last year, yup, 4 per cent".  If you can't even read the article properly, Mr or Ms Sub, at least avoid making the author look foolish with a smug little rhetorical flourish at the end that only serves to emphasise your mistake. 


What shall we do with the financial media?  Even when they try to set things right, they still get them wrong.  What chance does poor old Joe Public have?