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Challenges of Economic Data Interpretation
Economic data such as non-farm payrolls and GDP can be fragile and inaccurate due to the method of calculation, which relies on surveys and extrapolation. Misinterpretation may occur if factors like people on the sidelines or in the gig economy are not captured adequately. GDP, for example, comprises mainly of what people and entities spend, as well as exports. Interest rates heavily influence spending behaviors, with higher rates leading to more saving and lower rates encouraging more spending.