Silliness on the First Quarter GDP

Chart Source: Bureau of Economic Analysis

As we all know, GDP shrank at a 0.3 percent annual rate in the first quarter, the first decline in GDP in three years. The main factor from an accounting standpoint was a huge surge in imports which are counted negatively in GDP.

Many analysts were quick to dismiss the negative growth number and instead turn to the category final “final sales to domestic purchasers,” which grew at a respectable 2.3 percent annual rate, and pronounce all good.