- Macroeconomic indicator
- A macroeconomic indicator is a regularly published statistic that measures one part of the whole economy's performance, such as its output, prices, jobs or trade.
- Macroeconomic objective
- A macroeconomic objective is a goal set for the performance of the whole economy, such as steady growth, low unemployment or low and stable inflation.
The main UK macroeconomic indicators
Can you name the six indicators most often used to judge how the UK economy is doing?
Each card says what one indicator measures.
Real GDP growth is the percentage change in the value of everything an economy produces, measured after the effect of rising prices has been taken out.
Can you think of an example?
Nominal GDP rises from £2,400 billion to £2,472 billion, up 3 per cent. Prices rose 2 per cent over the year, so real GDP grew by only about 1 per cent.
Real GDP per capita is real GDP divided by the population, so it measures output per person rather than the size of the whole economy.
Can you think of an example?
Real GDP of £2,600 billion shared among 68 million people is about £38,200 each. A country with twice the GDP and three times the people is poorer per head.
The CPI and RPI are price indices that track the cost of a basket of goods and services bought by households; the yearly change in an index is the inflation rate.
Can you think of an example?
A basket costing £100 last year costs £104 now: inflation of 4 per cent. The RPI also counts mortgage interest and council tax, which the CPI leaves out.
The unemployment rate is the number of people without a job who are looking and available for work, as a share of the labour force.
Can you think of an example?
The Labour Force Survey asks households and follows the international definition. The claimant count adds up people claiming unemployment-related benefits, so it misses jobless people who claim nothing.
Labour productivity is output per unit of labour, which the ONS measures as output per hour worked, per worker and per job.
Can you think of an example?
A bakery's staff work 1,000 hours a week and turn out £25,000 of bread: £25 of output an hour. New ovens lift that to £30 with the same hours.
The current account balance is what a country earns from abroad through exports, investment income and transfers, minus what it pays abroad on the same items.
Can you think of an example?
Suppose the UK sells £900 billion of goods and services abroad and buys £950 billion, and net income and transfers add £10 billion: a current account deficit of £40 billion.