What use is a GDP recovery if living standards are stagnant?

Labour had better get used to headlines of economic upgrades. There’s about two dozen major forecasters out there, and each will take a turn to say that Britain’s doing better than they’d thought. To have such good news repeated will be a headache for Labour, as Iain Martin blogs today. But Labour are right to latch on to the caveat: the GDP number are not much use to someone facing a decade of wage stagnation. Words can be deceptive in economics: if you read ten news stories from ten forecasters talking about upgrades, it doesn’t necessarily mean things are getting better. The Treasury recently released five-year forecasts from the people it follows (pdf, here) and it’s not much better than the fairly glum forecasts from the Office for Budget Responsibility.

Anyway, is Britain growing faster than America – as The Times declared in its headline today? In this three-month period, yes.