Statistically so confusing they might as well be from another planet
DO you believe in numbers? Last week's official figures suggesting a 0.2% drop in gross domestic product, following the previous quarter's drop of 0.3%, heralded the dreaded double-dip recession.
The actual definition of a recession is brutally simple, two consecutive quarters showing gross domestic product in decline – and two consecutive quarter reductions we now have.
Yet, the announcement was met with muted mumbles in the market which expressed concern over the accuracy of the numbers because so many other indicators seem to point away from a dip.
And, as we know, the markets dislike surprises unless they come packaged up as a bonus.
Apparently, the UK is unique in that our Office of National Statistics issues gross domestic product figures only 25 days after the quarter end when only 42% of the numbers are available.
Would you issue your company management accounts on the back of only 42% of the information? Thought not.
I didn't know this but the remaining 58% of the calculation is based on our old friend, the computer model.
Yes, the same computer models that predict barbecue summers, arctic winters and the fact that Barcelona were going to win this year's Champions League.
In the forecasting business, what we do in the UK is called a flash estimate. This might be why other countries don't bother doing it.
My question though is more fundamental.
I can't get my head around the fact all of the millions of economic activities, all the buys and sells that go on every day, when all added together come in at 0.2 above or below the same activity compared with the previous period.
Surely the differentials should be greater?
Disturbed by these thoughts I carried out my own flash scientific exercise.
I looked at my weekly shopping bills for the past quarter to see if I was managing to achieve this remarkable balance in spend.
How would all of my banana, yoghurt and nacho purchases balance out in a 13-week period? Was I in growth or recession?
The result was a disaster – my weekly differential ranged wildly from week to week with no underpinning logic, short of being overly influenced by clever marketing tricks involving a few juicy three-for-two offers and 50% wine reductions.
If the weekly tolerance in the Forkin household differs by as much as 100% how does the whole UK economy manage to come in at less than 1%, whether plus or minus?
Another figure much-loved by economists is the balance of payments.
Each country produces its annual balance of payment figures, that is the difference between imports and exports.
The economic Holy Grail is to have a positive balance of payment figure, a surplus that shows you are exporting more than you are importing.
Our friends at the IMF decided to add all the countries' reported figures together and came out with some surprising results.
According to the IMF, in 2010, planet earth as a whole exported $331billion more than it imported.
We have no idea to what other part of the universe these exports went but, according to the numbers, go they did.
Even better, by 2014 the surplus will be $700 billion.
Politicians, the media, the market, business people all talk about confidence being the critical factor in getting us out of the current economic mess.
Confidence isn't a number but an intangible emotion influenced by the statistics seemingly produced in rather a haphazard way.
Maybe the Office of National Statistics could bring their expertise to my shopping.
At least we've got those extra-terrestrial exports to fall back on.