April 30, 2025
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 never-ending process of analyzing the GDP data, there is yet another series called “final sales to domestic purchasers” which measures how much U.S. residents are actually spending. It starts with final sales, but then subtracts exports (which represents how much foreigners are buying from the U.S.) and adds imports (which represents how much U.S. residents are spending on imports). The end result is a measure of sales by domestic purchasers.
Final sales to domestic purchasers which excludes both the change in inventories and trade rose 2.3% in the first quarter after having risen 3.0% in the fourth quarter. With a 2.5% decline in final sales and a 2.3% increase in final sales to domestic purchasers, the trade component subtracted 4.8% from GDP growth in the first quarter as exports rose 1.8%% while imports surged by 41.3%. In our opinion the 2.3% increase in final sales to domestic purchasers most accurately describes the strength of the economy in the first quarter.
Stephen Slifer
NumberNomics
Charleston, SC
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