Great analysis. Why didn't the increase in drug inventories mostly cancel out the rise in drug imports? And do most computer-related imports count towards higher inventory, investment, or consumption?
To answer in reverse order, most of the computer-related imports counted towards higher investment in this case (consumption was basically flat, and there was a few billion in increased inventories)
To answer on the drug front—I am not sure. Imports should theoretically line up with consumption growth + inventory growth, but the categories are not as clean as you'd like and the detailed data is still preliminary in a lot of cases. I'm still digging into this but I think we'll get more answers here when the full March trade data comes out next week and when the next GDP report comes out.
Great article. Seems like pharma was the only industry taking Trump tariff threats at face value but I have to imagine that’s because their procurement folks understand the grave seriousness of a disruption to their supply chain vs no toys on the shelves. Likewise, it seems like consumers weren’t taking Trump serious enough so will be interesting if there’s any way to get the same kind of analysis of just April.
I would imagine one factor is that it's a lot easier to make and transport extra drugs at short notice (small volume and much of the value is intangible IP). Lot harder to suddenly double refrigerator imports or something.
The US “privilege” will erode over time, until it eventually fades. Global investors, irritated by uncertainty, won’t abandon the dollar, but they’ll search for alternatives. Even the Roman Empire didn’t collapse with a bang; its decline was a slow, inevitable process. The Romans themselves hardly noticed it.
it makes NO SENSE that Import changes reduce GDP, "explaining" a headline drop. Yes the equation for GDP subtracts imports, *but the imports add to the other components of GDP*! the subtraction is to *stop double counting*! that's all. If imports rise, then they either go to the "I" or the "C" term of GDP. Imports increasing does not force down domestic production! not in 3 months. To elaborate: if there is an jump in shipments from overseas then this stuff comes in to either be counted as domestic Consumption or Investments/Inventory etc. When imports fall, nobody says "well actually true GDP has fallen, ignore the figures". But apparently the press want so badly to believe in the WH smoke and mirrors they fall for a basic deception in pointing at the "minus imports" part of the GDP equation.
Is this a critique of the article? Because Joey says this exactly. Imports can INDIRECTLY reduce GDP if a company reduces production in order to afford stockpiling imports.
Love the breakdown of investment vs inventories. Had an argument yesterday cuz we weren't sure how to read the contributing factors to gdp number. This clears it up pretty well.
Overall still looks like a strong economy to me? But tariffs are distortionary, which is part of the problem.
GDP is notoriously inaccurate and unreliable and always… always… is subsequently revised up or down after a few months/years. It can grow as a population grows, or shrink if a population shrinks. It includes all Government expenditure whose output value is assumed to equal its input value - a bit of a stretch - and therefore GDP will be affected by Government soebding.
A better, hardly perfect either, metric is GDP per capita because this tells whether people are getting richer or poorer, which is important.
Import tariffs only recently went into effect, some delayed, some reversed. To claim their effect is already visible in GDP figures - which are retrospective anyway - simply isn’t credible.
To pick just one variable in a multi-variable, chaotic, dynamic system such as an economy and award it causal status is like casting the runes… and what climate “scientists” do to predict Armageddon coming soon.
Some tariffs went into effect before others as the author mentioned, but given that humans have the ability to roughly anticipate future events, are expectations of future tariffs just not a credible factor to you either?
waste Federal Court, Judge Alsup ruled that only Congress can hire and fire federal workers, not the president. However, as you know, the US Constitution states the President is the Chief Executive of the Executive branch of the Federal Government and its bureaucratic employees. He can hire and fire anyone if congress appropriates the money. This explains why the US Supreme Court wrote a stay for the $2 billion going out of the country for USAID. https://www.npr.org/2025/02/27/nx-s1-5311445/federal-employees-firing-court-judge
Great analysis. Why didn't the increase in drug inventories mostly cancel out the rise in drug imports? And do most computer-related imports count towards higher inventory, investment, or consumption?
To answer in reverse order, most of the computer-related imports counted towards higher investment in this case (consumption was basically flat, and there was a few billion in increased inventories)
To answer on the drug front—I am not sure. Imports should theoretically line up with consumption growth + inventory growth, but the categories are not as clean as you'd like and the detailed data is still preliminary in a lot of cases. I'm still digging into this but I think we'll get more answers here when the full March trade data comes out next week and when the next GDP report comes out.
Where is this disparity that the initial commentary point to located in the piece?
Great article. Seems like pharma was the only industry taking Trump tariff threats at face value but I have to imagine that’s because their procurement folks understand the grave seriousness of a disruption to their supply chain vs no toys on the shelves. Likewise, it seems like consumers weren’t taking Trump serious enough so will be interesting if there’s any way to get the same kind of analysis of just April.
I would imagine one factor is that it's a lot easier to make and transport extra drugs at short notice (small volume and much of the value is intangible IP). Lot harder to suddenly double refrigerator imports or something.
The US “privilege” will erode over time, until it eventually fades. Global investors, irritated by uncertainty, won’t abandon the dollar, but they’ll search for alternatives. Even the Roman Empire didn’t collapse with a bang; its decline was a slow, inevitable process. The Romans themselves hardly noticed it.
I think the Eastern Romans noticed when Constantinople became Istanbul :)
it makes NO SENSE that Import changes reduce GDP, "explaining" a headline drop. Yes the equation for GDP subtracts imports, *but the imports add to the other components of GDP*! the subtraction is to *stop double counting*! that's all. If imports rise, then they either go to the "I" or the "C" term of GDP. Imports increasing does not force down domestic production! not in 3 months. To elaborate: if there is an jump in shipments from overseas then this stuff comes in to either be counted as domestic Consumption or Investments/Inventory etc. When imports fall, nobody says "well actually true GDP has fallen, ignore the figures". But apparently the press want so badly to believe in the WH smoke and mirrors they fall for a basic deception in pointing at the "minus imports" part of the GDP equation.
Is this a critique of the article? Because Joey says this exactly. Imports can INDIRECTLY reduce GDP if a company reduces production in order to afford stockpiling imports.
Any thoughts on why more recent data like unemployment claims seem relatively unchanged given impact of tariffs and uncertainty?
Love the breakdown of investment vs inventories. Had an argument yesterday cuz we weren't sure how to read the contributing factors to gdp number. This clears it up pretty well.
Overall still looks like a strong economy to me? But tariffs are distortionary, which is part of the problem.
GDP is notoriously inaccurate and unreliable and always… always… is subsequently revised up or down after a few months/years. It can grow as a population grows, or shrink if a population shrinks. It includes all Government expenditure whose output value is assumed to equal its input value - a bit of a stretch - and therefore GDP will be affected by Government soebding.
A better, hardly perfect either, metric is GDP per capita because this tells whether people are getting richer or poorer, which is important.
Import tariffs only recently went into effect, some delayed, some reversed. To claim their effect is already visible in GDP figures - which are retrospective anyway - simply isn’t credible.
To pick just one variable in a multi-variable, chaotic, dynamic system such as an economy and award it causal status is like casting the runes… and what climate “scientists” do to predict Armageddon coming soon.
What is GDP an inaccurate measure of?
Some tariffs went into effect before others as the author mentioned, but given that humans have the ability to roughly anticipate future events, are expectations of future tariffs just not a credible factor to you either?
Wrong data. Trump is correct about everything. You approve of 36 trillion in debt? Trillions in waste?
34 PPM fraud in the CO2 rise and 36 NOAA PhDs fired. ie: Kathryn McCain cctruth.org
36 total as of May 2024
patrick.disterhoft@noaa.gov, alici.edwards@noaa.gov, james.w.elkins@noaa.gov,
ed.dlugokencky@noaa.gov, nash.kobayashi@noaa.gov, kevin.d.knott@noaa.gov, dale.hurst@noaa.gov
christian.herrera@noaa.gov, duane.r.kitzis@noaa.gov, kathryn.mckain@noaa.gov;
ben.r.miller@noaa.gov; debra.k.lucas@noaa.gov; audra.mcclure@noaa.gov; ingrid.mielke
maday@noaa.gov; mark.leonard@noaa.gov; debra.j.mondeel@noaa.gov;
beverly.e.odonnell@noaa.gov; john.a.ogren@noaa.gov; ann.thorne@noaa.gov;
carolina.siso@noaa.gov; jim.wendell@noaa.gov; patrick.sheridan@noaa.gov; katy.sun@noaa.gov;
miyagawa.koji@noaa.gov; david.f.baker@noaa.gov; john.d.murphy@noaa.gov; cindy.woods@noaa.gov;
jamese.sims@noaa.gov; mary.erickson@noaa.gov; Scott.D.Woodruff@noaa.gov;
louis.uccellini@noaa.gov; Erica.Burrows@noaa.gov; Bert.Katz@noaa.gov; Yanjung.Guo@noaa.gov;
Gregory.Jennrich@noaa.gov; Peitao.Peng@noaa.gov;
waste Federal Court, Judge Alsup ruled that only Congress can hire and fire federal workers, not the president. However, as you know, the US Constitution states the President is the Chief Executive of the Executive branch of the Federal Government and its bureaucratic employees. He can hire and fire anyone if congress appropriates the money. This explains why the US Supreme Court wrote a stay for the $2 billion going out of the country for USAID. https://www.npr.org/2025/02/27/nx-s1-5311445/federal-employees-firing-court-judge
https://usafacts.org/articles/how-many-people-receive-government-assistance/
100 million people on entitlements.
https://federalsafetynet.com/entitlement-programs/entitlement-spending/
$3363 billion That is $3.3 trillion per year.
https://www.opb.org/article/2023/08/05/columbia-river-salmon-habitat-spending-study/
Or https://salmonproectiondevice.com/Billions_spent_on%20hatcheries.pdf
Salmonprotectiondevice.com will fix the declining salmon and sturgeon
runs in the Columbia river within a few years. The Sea Lions have always been the issue for the declining runs.
https://thelawisyourattorney.com/judicial-bias-against-litigants-in-dam-removal-cases/