Thursday, 23 January 2014

Charts today - forecasts, jobs, growth and Davos

A few charts that are providing insight today...
Forecasts...are always difficult.  Yesterday UK unemployment fell to 7.1%, only just above the 7% threshold level the Bank of England set as a possible point where the extraordinary QE policy stimulus might start to abate.  That happened just a bit more quickly than any of the forecasters anticipated...

(source: The Financial Times)

Here's the problem with single statistic policy targeting: when the statistic goes awry it can cause problems.  We only need to look at the Federal Reserve and their own struggles with an unemployment rate impacted by a falling labour force participation ratio to see this.

The reality in the UK from a broader economic perspective is akin to this chart below from the US:

Still, UK policy-makers are slapping themselves on the back as the local economy received the greatest growth uplifts.  It is a new slower growth world even so.  Advanced economy growth of 2.2% and 2.3% for 2014 and 2015 respectively is fine but...not the wonderful bounceback economic observers would have hoped for. 

Anyway, we have the global leaders at Davos to help sort out all the world's problems. I liked this chart showing where attendees came from.  Broadly speaking the slower the regional economic growth, the higher the number of attendees! 



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