Expected fall in GDP even after huge job boom

 
Ben Southwood
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THE UK is still mired in a W-shaped, “double-dip” recession, according to many analysts’ predictions of the latest preliminary estimates of GDP, set to be released by the Office for National Statistics on Wednesday.

The forecast will come as a blow to the government, whose attempts to come closer to balancing the budget are becoming ever harder.

This negative forecast comes despite resurgent employment – the quarter to May was the best three-month period for 22 months, with 181,000 employees added to rolls across the country.

In combination with the ugly GDP figures, this has sparked a debate over whether workers are producing anything – especially when the transfer of jobs has been from public to private, and private sector jobs tend to be more productive.

Other commentators have suggested that the current malaise is overstated by GDP, suggesting other metrics such as noted economist Arthur Okun’s Misery Index, which sums unemployment and inflation.

But our Misery Index, which includes purchasing power as measured by the Tax and Price Index (TPI) and unemployment by the Labour Force Survey (LFS) shows that the country is still miserable compared to pre-recession times – the average score for 2012 so far is 11.4 compared to an average of 8.1 for 2002-2007.