MACROECONOMIC INDICATORS

MACROECONOMIC INDICATORS

1. GDP

   • The monetary value of all the finished goods and services produced within a country's borders in a specific time period
   • GDP PER CAPITA: the GDP divided by the number of people in the country

2. MEASURES OF INFLATION

   • CPI
     • a weighted price index, which measures the monthly change in the prices of over 600 different goods and services
     • The weights are revised each year, using info from the Family Expenditure Survey.
     • The expenditure of the highest income households, and of pensioner households dependent on state pensions, is excluded.
     • does not include any housing costs, such as the effect of mortgage rates or council tax.
   • RPI
     • This official measure is calculated each month by taking a sample of goods and services, which the typical household might buy.
     • Included are such items as food, heating, housing, household goods, bus fares and petrol.
     • "headline" rate of inflation

3. UNEMPLOYMENT

   • CLAIMANT COUNT
     • counts only those people who are eligible to claim the Job Seeker's Allowance.
     • PROBLEMS WITH THE CLAIMANT COUNT
       • misses out many people who are interested in finding work and who might have searched for work in the recent period
         • but they don't meet all of the criteria for claiming and therefore are not included in the monthly unemployment count.
   • LABOUR FORCE SURVEY
     • covers those who have looked for work in the past month and are able to start work in the next two weeks
     • only includes those who are unemployed and claiming benefit.
     • On average, the labour force survey measure has exceeded the claimant count total by about 400,000 in recent years.

4. BALANCE OF PAYMENTS ON THE CURRENT ACCOUNT

   • comprises the balance of trade in goods and services plus net investment incomes from overseas assets and net transfers
   • Net investment income comes from interest payments, profits and dividends from external assets located outside the UK.
   • Transfers into and out of a country include foreign aid payments
     • For the UK the net transfers figure is negative each year, mainly due to the UK being a net contributor to the budget of the European Union.
       • As a rich nation, the UK makes sizeable foreign aid payments to many other countries.