this post was submitted on 30 Apr 2025
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Peter Retarddo's claim: Big imports ahead of tariffs beat down GDP, and he praised large investment growth.
The investment growth was largely inventories. Most of the imports go first to inventories, but a lot of the imports are in a bonded state, waiting for someone to pay the tariffs on them, or decide to ship them back. Generally, imports get subtracted from GDP, but are cancelled by inventories and eventual sales. Inventory growth is usually negative for future production/jobs.
Consumption did grow 1.8%, and it is a good estimate for stable growth. Except, in this case, consumption pulled forward from tariffs means lower levels next quarters, and bigger inflation adjustments downward.
https://www.bea.gov/news/2025/gross-domestic-product-1st-quarter-2025-advance-estimate
US has very corrupt GDP measurements, where high interest rates boost GDP calculation through the most corrupt component of Owner's equivalent Rent (about 14% of GDP). This is a made up non-transaction amount. Amazingly, US also adds "free financial services" as though a fair cost was charged into GDP.