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On Interpreting Economic Statistics

The economy grew at an annualized rate of 4.1% last quarter. Why, we haven’t had that level of economic growth since Obama was President (4Q 2011, for those wondering, and also Q4 2009). But the more important question for the average person is not how well “the economy” has been doing, but how this growth has affected him or her. This level of economic growth only tells us that more economic activity is happening. It says nothing about who is benefiting. Did the average person get a 4.1% raise last quarter? Did your investments increase 4.1%? No? Well, who are you cheering for if you are so excited about 4.1% gains?

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