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. This is not serious analysis.

This category sums the growth of consumption, fixed investment, and government expenditures. While often this may give a more useful figure in underlying growth patterns, that is not the case here. It effectively acts as though the huge surge of imports in the first quarter had no effect on these categories. That is hard to........

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