What to make of the GDP fall?

“Recession here we come, a snow-dabbed double-dip” tweeted Faisal Islam, Channel Four’s economics editor. He summed up much of the hysterical reaction. It may spoil a good story, but here is what I suspect the broadcasters won’t tell you today.

1. Erratic GDP swings are common when recovering from a recession. Remember how stunned everyone was with the surging quarter three data? Now, we’re all shocked by plunging quarter four figures. I’d advise CoffeeHousers to treat these two imposters just the same. After the 80s recession, quarterly growth rates swung between -0.7 percent and 1.5 percent. Following the ERM-induced recession in the 90s, growth rates swung between -0.2 percent and 0.5 percent. A swallow does not make a summer. A quarter of contraction does not make a double dip.

2. The GDP data doesn’t square with the many other indicators of economic recovery, all of which are reasonably strong. And the Consumer