June 25, 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 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 declined 4.6% in the first quarter.
Following the 5.0% GDP drop in the first quarter, we expect second quarter GDP to plunge by 50%, but then as federal government stimulus checks work their way into the hands of consumers and businesses, we expect GDP growth to rebound by 51% in the third quarter and an additional 7.0% in Q4.