GDP

July 30, 2020 The preliminary estimate of second quarter GDP growth came in a -32.9% compared to a first quarter drop of 5.0%.  That was roughly in line with what had been expected.  But that is history and what we are really interested in is what happens next.  Given...

Final Sales

July 30, 2020 When the economy is slowing down, firms will accumulate unwanted inventories.   Those inventories still show up in GDP, but they are unsold.  Hence, GDP will be biased upwards.  Similarly, in good times businesses will reduce inventory levels to satisfy...

Final Sales to Domestic Purchasers

July 30, 2020 It is important to remember that final sales is a measure of how many domestically produced goods are sold each quarter.  But we also sell goods overseas — our exports.   And we purchase goods from other countries — our imports. In the...

Gross Domestic Purchases Deflator

July 30, 2020 There are many different deflators that are available.  This one is for gross domestic purchases which measures prices paid by U.S. residents.  It is the one measure of inflation that the Commerce Department talks about when it releases the GDP report.  ...