We’ve been doing these “Off the Grid” indicator reports for years, and the most common question we get about them is “Why”? As in “Why do we care about data points that policymakers don’t talk about?” And “Why does any of this matter?”
Now we have an example of why: Brexit. To look at the standard economic talking points, the British people should have been happy to go with the status quo and “Remain”. Consider these customary measures of employment, inflation, output, and well-being:
- Current unemployment at 5%, and much lower joblessness than other developed economies after the Financial Crisis and Great Recession. Peak unemployment post 2000 was 8.5% in 2011 – better than the US and most European countries. Source: https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/unemplo...
- Inflation is running less than 1% - lower than what policymakers like to see, but very friendly to consumers. The worst things got were in 2008, when inflation peaked at 4.8%. Source: https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/l55o
- GDP Growth shows none of the quarterly volatility of the US economy, and has run between 2.2% and +5% since 2011. Source: https://www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/ihyo
- Income inequality, according the GINI Index, is 32.4 – on par with Canada (32.1), Ireland (33.9) and better than Japan (37.9). Source: https://www.cia.gov/library/publications/the-world-factbook/rankorder/21...
- Large scale political outcomes – the kind that can move markets – are more than a function of simple economics. That’s why we look at a range of datasets that we call “Off the Grid Indicators”. There are numerous graphs and tables available in the attachment to this email. Here’s the highlight reel:
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