Our fragile recovery can easily be derailed

Apart from getting out there and talking to real people in the real economy, the two pieces of data that give the best picture of what is really going on in the economy are the monthly tax returns and employment data.

The end-July tax returns showed good growth in tax revenues a few weeks back and supported the notion of economic recovery. The labour market data this week confirmed this picture of an economy that is steadily lifting itself up, but the quarterly National Household Survey also provided a strong note of caution.

Total employment increased by 31,600 in the year to the end of June and has now edged over the 1.9-mark. Full-time employment increased by 33,500 and part-time employment declined by 1,900. This is a very positive trend.