Kai Ryssdal

Truly, I'm sorry.

Say it with me now.

We've been over this a couple of times.

GDP is C, that's consumer spending, plus I, investment spending, plus G, government spending, plus X, exports, minus M, imports, net exports.

In other words, that is the equation for GDP.

Now, final sales to private domestic purchasers, and let me say that again real slow.

Final sales to private domestic purchasers zeros out three categories in GDP so that we can get a better sense of how the domestic economy is going.

Core GDP, you might call it.

Category number one subtracted from GDP?

We get rid of it because net exports is about demand from other countries.

What we want to measure is demand from American businesses and consumers.

All right.

Expendable category number two.

Inventories.

Here's why.

If you had a whole bunch of unsold cars, do you really want that in your measure of what people want to buy?

Well, no, because you remember last year when companies were stockpiling goods to get ahead of tariffs?

You definitely do not want all that unsold stuff that's just sitting there in your calculations for sales that might not come until six months later.

Category three that we subtract from GDP.

At the end of last year, there was that government shutdown.