How to ignore `node_modules` folder during TypeScript build in VSCode

In Version 0.5 you can hide files and folders

Open Files->Preferences->User Settings and add something like

{
        "files.exclude": {
            "**/.git": true,
            "**/.DS_Store": true,
            "jspm_packages" : true,
            "node_modules" : true
        }
}

You can now use exclude in your tsconfig.json file:

{
    "exclude": [
        "node_modules",
    ],
    "compilerOptions": { 
        ...
    }
}

https://github.com/Microsoft/TypeScript/wiki/tsconfig.json

Note it's a sibling to, not child of, compilerOptions.