Wednesday, 2 September 2015

The National Accounts

The GDP figures came out yesterday and they were quite weak.

The CBA economics team said this
"Over the past year the biggest contribution to the 2% GDP rise was household spending which explained 1.4 percentage points. Net exports added 1.0 ppts and general government contributed 0.7 ppts. Dwelling construction added 0.4ppts. The largest detractions from growth came from falling business investment, ‑1.3ppts and inventories, ‑0.3ppts.
Weaker bulk commodity prices, for iron ore and the coals, are restraining Australia’s main national income measure, nominal GDP, lower. So the nominal economy, the one we live and pay taxes in, expanded by  only 1.8% in 2014/15, the lowest annual growth since 1961/62, even weaker than in the last recession in 1991/92.'
The nominal GDP figures were less that the Real figures because the GDP Deflator was negative in other words overall the economy experienced deflation  of 0.5% in the June Quarter and the year to June.
If not for the public sector the economy would have fallen!
Here is Greg Jericho
Gosh wouldn't it be embarrassing if you predicted stagflation!. 
Speaking of embarrassing yourself.
Here is the ABS on estimating household expenditure on tobacco.
"The ABS estimates household expenditure on tobacco on a quarterly basis. To do this, the ABS uses aggregate sales data from relevant suppliers and deflates their values using a single price index for the cigarette and tobacco expenditure category. 

The number of cigarettes per packet is not picked up in the aggregate sales data. The price index used to deflate the aggregate sales data accounts for changes in quantities, including the number of cigarettes per packet. This results in a chain volume measure where the price impacts have been removed to obtain the underlying consumption expenditure of Australian households. 

The chain volume measure (seasonally adjusted) of household consumption for cigarettes and tobacco has declined 39% from March 2001 to March 2014.

The ABS does not measure or estimate the number of cigarettes consumed."
The hapless Sinclair Davidson criticises Greg Jericho for saying the constant price estimates are measuring volume. Just a pity he doesn't read what he links!
 He mightn't understand english though as he clearly did not understand what predecessor means even with a dictionary meaning.

Good grief he can't help himself

Let us make it easy for him. Changes in quantities means volumes. They infer it by deflating the current price estimates.pants on fire!

He really should study some basic economics. They teach this in first year!