Labour: GDP figures 'not good news'

When Mervyn King does cautious optimism, you can keep the emphasis on cautious. The Bank's new forecast for the economy is rather more upbeat than it was in August, and to judge by the "backcast" for GDP, it expects some upward revision of not just that disappointing third-quarter decline in output, but some earlier ones too (though not the kind of dramatic change to the picture predicted by the likes of Goldman Sachs).

Today’s figures show that employment rose by 167,000 (0.6%) in Q3, thanks to which unemployment fell slightly. This is not as good as it looks. Within this 167,000 increase, the number of full-time employees actually fell by 62,000. A net 876,000 full-time jobs (4.6% of the total) have been lost since employment peaked in 2008Q2.

Shadow financial secretary to the Treasury, Chris Leslie, says despite the upward revision, the latest figures make grim reading and show that George Osborne is still pursuing the wrong economic policies.

For some time time now, the American economy has been a strange dichotomy. On the one hand, we’re in the midst of an historically strong four-year bull market, yet the unemployment rate remains stubbornly high. The real estate market is showing impressive strength, yet GDP growth is sluggish. The result is a situation where consumers, businesses, and even the government have become overly cautious, each waiting for the other to make the first move before they start behaving like we’re in a real recovery. Last month, however, the situation began to look a bit brighter.