THE Central Statistics Office gave us two early Christmas presents last week but they were more in the way of stocking fillers than diamonds or gold.

The first stocking filler was the much flagged quarterly national accounts, which suggested that gross domestic product expanded in the third quarter by 0.3pc. The second stocking filler was the little noticed, and still experimental, services producer price index, which showed that the fees charged by architects, lawyers and management consultants among others were falling.

Both sets of figures come with some fairly significant caveats: the services producer price index is brand new, while the quarterly, seasonally adjusted national accounts data is relatively new, although now widely watched by analysts.

The CSO displays a certain reluctance to stand over the reliability of either set of numbers, but this does not mean they are worthless. International investors and commentators place great emphasis on quarterly changes in GDP, so it would be wrong to ignore the increase too much because perception is important: if foreigners believe things are getting better, then the very high interest rates we pay at present will go down and things really will be better.

Looking at Gross National Product, there is also good news, although it is hardly shout-it-from-the-rooftops good news. GNP fell 1.4pc, bringing the annual drop to 11.3pc. While the 11.3pc figure would give even the most incurable optimist pause for thought, it is still significantly below the declines of 12.2pc in the second quarter and 12.8pc in the opening quarter.

In short, if the quarterly accounts were the only figures suggesting things were improving, one would shrug them off as an insignificant aberration. But there have been several other encouraging signs lately. The new services producer price index showed costs were coming down -- even in the professions which were protected against the effects of the recession for too long, thanks to their on-going conspiracy against the layman. While the 3.3pc decline in legal costs is not enough when one considers the rate of deflation, it is a welcome start and shows that almost every sector of the economy is beginning to realign costs with the new reality.

Unemployment remains high and woefully underestimates the real picture in the country because so many people are excluded from the measure or are included on FAS programmes, but at least the rate of increase has slowed significantly.

Traditional economic models would suggest that the economy's biggest problem right now is the consumer. Retail sales continue to fall, savings rates continue to rise and the quarterly figures show personal spending on goods and services in the third quarter as down 7.3pc in volume terms on the same quarter a year ago, with expenditure on goods down 9.8pc and services 5.3pc.

While this is a source of concern to many, and is undoubtedly hurting the High Street, I can't quite agree with those economists who argue that what we need now is for consumers to take out their wallets or purses and spend our way out of the recession. While it is hard to think of a more pleasant way of doing one's bit for the nation -- "one's patriotic duty," to use Brian Lenihan's unfortunate flourish -- it seems to me that consumers are wise to continue saving.

We are not out of the woods yet. We may have outrun the wolves for now (as they chew over the remains of Greece and Dubai) but we are only in a clearing. It is true the trees are thinning out, but they remain thick and give little visibility. Wasting resources at a time like this is foolish. So much could happen in the next few months and wolves could soon look up from the remains of their 2009 feast and start howling again.

Source:  www.independent.ie