So, GDP is out today. The market expects a 1% fall, ANZ has gone as far as 1.2% (I’m talking about a quarterly seasonally adjusted fall – none of this annualised rubbish).
Now, I’m not so sure. Yesterday’s current account deficit came in on the money, but the deficit as a % of GDP was lower than expectations. There are three possibilities:
- The GDP deflator is going to be mighty strong (even with inflation pressures tumbling and the TOT falling),
- December activity is above expectations,
- Previous activity has been revised up (at least within the last year).
Now, it is dodgy trying to get a feeling out the the BOP figures for what GDP is – but with current estimates I could only get a small GDP fall to justify a 8.9% current account deficit. Combined with the hours worked revision today’s decline might be relatively small.
4 comments
3 pings
goonix
March 27, 2009 at 9:05 am (UTC 12)
Agreed with the annualised thing – heard it on the radio this morning wrt the US and it is a pretty misleading way of putting things.
Matt Nolan
March 27, 2009 at 9:07 am (UTC 12)
@goonix
Its the way economists in the US do it – so of course its misleading
Us NZ economists are far more interested in informing and helping the public
agnitio
March 27, 2009 at 9:53 am (UTC 12)
one line description of the annualised issue please?
Matt Nolan
March 27, 2009 at 9:59 am (UTC 12)
The annualised rate gives you a number that tells you what annual growth would be if the current quarterly rate of growth remained for the whole year.
As a result, GDP might fall by 0.1%, but the annualised rate would be closer to 0.4% – so it makes movements sound a lot bigger than they are.
As a result, you hear that “annualised GDP fell 6.3% in the US” – but the actual seasonally adjusted fall in GDP was only 1.5%.
It is a bit misleading – as it sort of tricks people who don’t know about the numbers to believe that the movements in GDP are a lot bigger than they actually are …
December 2008 GDP | TVHE
March 27, 2009 at 11:01 am (UTC 12)
[...] GDP deflator did rise a lot more strongly than I expected. [...]
NBA Live 09 - Made Fresh Daily - EAsports | Sports, Betting and Training Blog.
March 29, 2009 at 6:42 pm (UTC 12)
[...] December 08 quarter GDP out today | TVHE [...]
Theo Paphitis on the UK Economy | Adam Arnold - The Smarter CEO
March 31, 2009 at 12:47 pm (UTC 12)
[...] December 08 quarter GDP out today | TVHE [...]