Taking the Pulse of the Economy Reading the financial news is somewhat complicated when the subject is overall economic activity. In fact, when measuring the performance of the aggregate economy there is no single number that does the job. Instead, a variety of statistics released by the government on a monthly or quarterly basis, and published in major newspapers, (9) ... It is useful to divide these statistics into measures of aggregate output and unemployment on the one hand,. (10) ... Aggregate output and employment. The most comprehensive measures of economic activity is real GDP. Estimates are released in April for the first quarter (January-March), (11) ... Al though real GNP is released as a dollar figure, the most important feature is its rate of growth. Thus, if real GNP grows at an annual rate of 4% during a quarter, that is considered a fast pace of economic activity; if it grows by only 1% that would be slow. The most important number released on a monthly basis is the unemployment rate. Increases in the unemployment rate of one-half of one percent during a one-or two-month period implies that (12) ... The price level. The GNP deflator is the most comprehensive measure of the price level. (13) ... It is released quarterly along with data on GNP. A rate of increase in the deflator of 3% or 4% on an annual basis has been considered acceptable in recent years. Two somewhat narrower measures of inflation are released monthly: the consumer price index and the producer price index. As suggested by their names, (14) while the latter measures price changes at the wholesale level. For obvious reasons, although the consumer price index is a less comprehensive measure of the price level than the GNP deflator, it receives the lion’s share of attention because it measures how inflation influences each of us directly in our role as consumers. Once again, a 3% or 4% increase on an annual basis is considered acceptable; 6% or 8% is not. A. Our knowledge of how best to construct such a model is far from complete B. in July for the second quarter (April-June), and so on C. serve as important indicators D. in terms of the results that formal econometric models of the economy have produced E. the former measures the rate of change in prices of goods purchased by the typical consumer (as defined by the Department of Commerce) F. It is a weighted average of prices of all goods and services produced in the economy G. economic activity is slowing down sufficiently to take its toll on the work force H. and the price level and inflation on the other