“Services growth in December pushes up GDP estimate” was the headline on ONS’s press release announcing last week’s revised estimate of GDP in the final quarter of 2009.

And that’s the way many journalists reported it. But it is wrong.
 
The actual GDP in that quarter was lower, by £133 million, than the ONS had previously estimated. The earlier estimate suggested  a GDP of £315,845 million in that quarter: the new estimate was £315,712 million.
 
So how can that have pushed up the GDP estimate? It can’t. What was pushed up, from 0.1 to 0.3 per cent, was ONS’s estimate of the growth in GDP between the third and the fourth quarter.
 
So how, if the economy grew more rapidly in the fourth quarter than previously estimated, can the GDP actually have shrunk? The reason is that the ONS also revised its estimates for previous quarters at the same time, and found that they were lower than it had believed.
 
So the fourth quarter’s 0.3 per cent growth was the emergence from a deeper trough than previously supposed. The faster growth in the fourth quarter was the result of a downward revision for earlier quarters.
 
Several journalists, including Patrick Hosking of The Times and Edmund Conway of The Daily Telegraph pointed this out, but because the figures appeared on a Friday they were not analysed as closely as they might have been in Saturday’s papers. Mr Conway quoted Andrew Lilico of Policy Exchange, who appears to have been the first to spot this sleight of hand.
 
The ONS ought to have been aware that its press release, though accurate in content, was wrongly headlined. It should have read: ”Services growth in December pushed up GDP growth estimate”. It would then have been accurate. Given the intense scrutiny of the economic statistics as the UK emerges groggily from the recession, the misrepresentation is even more regrettable.
 
Nor does the graph published by the ONS make it particularly clear.
 
                  
 
Several commentators on Conservative Home blogsite, where Andrew Lilico posted a commentary yesterday, have called for Sir Michael Scholar and the UK Statistics Authority to become involved. The ONS could certainly have made it clearer that the revised growth rate for quarter four was strongly influenced by downward revisions to previous quarters.
 
Does it make much difference? You can argue that the recession was deeper than we previously thought (glass half empty) or that the recovery is a little quicker than we thought (glass half full). But it takes a lot of thinking and quite a bit of digging into ONS data to work out what is going on.
 
I don’t question (unlike some of those on Conservative Home) that the ONS is doing its best to get the figures right. But it isn’t doing quite so well at explaining them, and that increases suspicion about all UK statistics.