The Trump administration may exclude government spending from GDP, obscuring the impact of DOGE cuts.

Commerce Secretary Howard Lutnick said Sunday that government spending could be separated from gross domestic product reports in response to questions about whether the spending cuts pushed by Elon Musk’s Department of Government Efficiency could possibly cause an economic downturn.

Doing so could potentially complicate or distort a fundamental measure of the U.S. economy’s health. Government spending is traditionally included in the GDP because changes in taxes, spending, deficits and regulations by the government can impact the path of overall growth. GDP reports already include extensive details on government spending, offering a level of transparency for economists.

Musk’s efforts to downsize federal agencies could result in the layoffs of tens of thousands of federal workers, whose lost income could potentially reduce their spending, affecting businesses and the economy at large.

The commerce secretary’s remarks echoed Musk’s arguments made Friday on X that government spending doesn’t create value for the economy.

he Commerce Department’s Bureau of Economic Analysis published its most recent GDP report on Thursday, showing that the economy grew at an annual rate of 2.3% in the final three months of last year.

The report makes it possible to measure the forces driving the economy, showing that the gains at the end of last year were largely driven by greater consumer spending and an upward revision to federal government spending related to defense. Still, the federal government’s component of the GDP report for all of 2024 increased at 2.6%, slightly lower than overall economic growth last year of 2.8%.