A series of comments from Trump officials in recent days raised concerns that the administration may try to look differently at a key economic measure of America’s economic health: the quarterly reading of the gross domestic product (GDP).
It’s an idea under consideration, but its exact form is unclear. Elon Musk is the idea’s most vocal proponent, saying that a “more accurate measure of GDP would exclude government spending.”
At issue is that the government already publishes precisely such a figure known as the Value Added by Private Industries (VAPI). But the fact that Musk is pushing it amid his DOGE work — another Trump official has gone further by suggesting that it might be possible to pick and choose government spending — has raised questions about whether this is primarily an attempt to minimize some of the negative effects from Musk’s efforts.
“It seems like a strange place to start to say, hey, we’re going to have the greatest economy in the history of the globe, but we’re going to have to measure it differently because you can’t see it,” Doug Holtz-Eakin, president of the American Action Forum, said in a recent episode of Yahoo Finance’s Capitol Gains podcast.
“That’s not a great sales job,” he added.
The push is also curious as, overall, in spite of widespread concerns about runaway government spending, the government’s piece of America’s gross domestic product has actually declined somewhat as private sector increases have outpaced government growth.
The quarterly GDP and VAPI are both gathered and released by the US Bureau of Economic Analysis (BEA), an agency of the Department of Commerce. The GDP reading for the first quarter of 2025 — the first release that will include Trump’s time in office — is due next month.
Concerns about a slowing GDP have also been on the rise after the start of the Trump presidency saw a variety of actions — from tariffs to DOGE to an immigration crackdown — that could provide a drag on economic output.
JPMorgan Chase recently revised its first quarter GDP prediction from 1.5% to 1% in part because of the trade tensions. Goldman Sachs is lowering its GDP projection as well, reducing its forecast for growth at the end of 2025 to 1.7% from 2.2% previously.
Musk’s push for the idea is based on his oft-argued point that government spending can push GDP “artificially high” without helping the economy.
But it comes as Musk-led downsizing of federal agencies is beginning to be felt in government data with federal government employment falling by 10,000 in February.
Further firings of federal workers and an abrupt cutoff of government spending could impact the economy in a variety of negative ways.
Trump added to the private sector focused commentary when he spoke to reporters in the Oval Office Friday following the recent jobs report and said government jobs are “not the jobs you want.”
“We’re trying to shrink government and grow the private sector,” he added.
Commerce Secretary Howard Lutnick oversees the BEA and recently promised to separate out the data, but he also seemed to go further and said he wanted some government data to be counted and others excluded.
“It goes like this,” he told Fox News, “if the government buys a tank, that’s GDP, but paying 1,000 people to think about buying a tank is not GDP. That’s wasted money.”
Other Trump officials, like Treasury Secretary Scott Bessent this week, have touted an overall Trump administration effort to “reprivatize the economy” but without weighing in on the data one way or another.
Officials at the BEA didn’t respond to questions from Yahoo Finance on exactly what Lutnick meant and how such a partial measure might be calculated, but the comments have been widely noted in economic circles.
President Donald Trump speaks to reporters as he prepares to depart the White House on Feb. 28. (Saul Loeb/AFP via Getty Images) ·SAUL LOEB via Getty Images
Trump’s long and fraught relationship with economic data is also a factor. Trump aides held frequent discussions in his first term about calculating annual GDP growth, looking at the potentially more flattering measure of change between the fourth quarter of one year and the fourth quarter of the following year.
At other times Trump went further and simply called economic data he didn’t like fake. Then-press secretary Sean Spicer somewhat infamously said in 2017, soon after Trump’s first win, that jobs numbers “may have been phony in the past, but it’s very real now.”
Read more: Do you pay taxes on unemployment? What to expect when you file your return.
Left-leaning economic observers have also been outspoken in their criticisms in recent days. Lindsay Owens, director of the Groundwork Collaborative, told Yahoo Finance this week that this idea was indicative of “the phase of the Trump administration where they start cooking the books,” pointing out Trump’s history with economic data and saying the underlying concern in her mind is a Trump administration “worrying about recession risk.”
Plenty of economists Yahoo Finance spoke with this week also underlined that it’s absolutely fine for different administrations to highlight different slices of economic data — an example from the Biden years was a heavy focus from his aides on the Black unemployment rate — if that’s the path Trump chooses.
“If you want to make the case to measure things differently, sure, that makes sense,” noted Holtz-Eakin, “but I see no reason to take anything out or somehow not collect data we are currently collecting. That’s a valuable thing that the BEA does and should not be tinkered with.”
Ben Werschkul is Washington correspondent for Yahoo Finance.
Every Friday, Yahoo Finance’sRick Newman and Ben Werschkul bring you a unique look at how U.S. policy and government affects your bottom line on Capitol Gains. Watch or listen to Capitol Gains on Apple Podcasts, Spotify, or wherever you find your favorite podcasts.
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Joanna Lyons has been writing about politics, health, business, parenting and finance for over 10 years. She also writes about her hobbies and interests in her spare time.
