Since When Is Plunging Trade ‘Good News for GDP? Cato’s Daniel Griswold

This morning’s Commerce Department report on second-quarter GDP contained what passes for good news these days: the U.S. economy shrank at an annual rate of only 1.0 percent in the April-to-June quarter. And in the twisted logic of conventional thinking, a drastic fall in international trade was supposedly part of the good news.

An Associated Press report beautifully captures the conventional wisdom. Buried deep in the story was this gem: “An improved trade picture also added to economic activity in the spring. Although exports fell, imports fell more, narrowing the trade gap. That added 1.38 percentage points to second-quarter GDP.”

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