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US GDP figures are in and they're surprisingly strong:
https://www.bea.gov/news/2025/gross-domestic-product-3rd-quarter-2025-initial-estimate-and-corporate-profits
These are truly enviable numbers. In Australia we get half that and almost totally driven by immigration, no productivity growth. Europe and the UK barely get real GDP growth at all. US immigration is down, yet growth is up.
But are the US figures made up?
I imagine that there was pressure on the statisticians to fiddle the figures to put Trump in a better light.
Yet there is also the example of the Fed resisting Trump's demands for interest rate cuts. One also imagines that the economists who calculate GDP are unlikely to be Trump/tariff fans. I don't know how these factors balance out. It does seem rather surprising for US GDP growth to be so high, especially since it seems to be consumption driven rather than investment driven via the AI boom.
Personally I've long thought that GDP figures (real, PPP and especially nominal) are overvalued. Making houses more expensive by raising demand via financial schemes or immigration isn't productive economic activity, nor is much of the financial services industry (high speed trading for instance). There is obviously a role for banking and capital allocation, futures and derivatives yet it should be weighted lower compared to production of goods like iron, food, energy and aircraft engines. In many rich countries there's a whole class of highly paid consultants, officials and managers who disrupt productive activity. The food and health sector also seems rather unproductive, encouraging people to gorge on unhealthy food and then expensively treating the symptoms of obesity, shovelling money into keeping the very old alive for a few more, low-quality years... You could have a society with lower GDP but higher real-world prosperity and national power.
But the GDP figures do tell us something. More growth is usually good, especially if it's derived from productivity gains.
Do people think that the US economy is doing well? Faked numbers? K-shaped growth? Or just a result of massive deficit spending?
Used house sales are not part of GDP. Realtor fees are, but those don't seem to be a significant part of this growth (we'll need to wait for final numbers to be sure). HST, futures, and derivatives do not (directly) contribute to GDP. For that matter, neither does iron, and usually neither do energy or aircraft engines, at least when the purchasers are domestic.
Guys, GDP is the value of final goods and services produced in an area. In other words, it's (consumer spending) + (investment) + (government spending) + exports - imports.
Boeing buys a GE engine? Does not count towards GDP.
Lockheed Martin buys steel? Does not count towards GDP.
I buy onion futures? Does not count towards GDP, except any transaction fees, which, even when they are high, are a small part of the transaction.
Delta buys an airplane? That's investment, it counts.
The government buys a missile? Government spending, it counts.
Simple as.
I'm reading that financial services contribute about 8% to US GDP which is awfully high. 'Imputed rent' of homeowners living in their own homes is 8% in the US, 12% in the UK, which is in part derived from house prices being propped up by various measures. Imputed rent is not a real thing, it's imaginary. Enjoying a house that's built is the whole point of a house, that's why people buy them.
Building engines is measured as part of GDP. It's going to be investment for somebody who finally buys the plane or perhaps an export, this is one of the fields where US manufacturing still leads the world. More importantly, building engines is clearly related to prosperity, technology, productivity and national power, which is what GDP is really supposed to be telling us about.
High frequency trading makes money, their workers certainly earn wages. I would be highly surprised that they weren't counted as part of GDP. But it's not nearly so clear that their work is productive or desirable, considering the level of high-quality brainpower that these firms soak up. Britain started counting production of illegal drugs as part of GDP at one point, that's not productive economic activity.
Anyway, one of my points is that GDP is not that helpful as a measurement, so if production of engines wasn't included, then it would only strengthen my argument. But since it is, why bring it up? Where exactly engines belong on some accounting category doesn't seem very useful.
Obviously, but it would be even weirder if renters contributed to GDP but homeowners didn't.
I covered the export case already. If the engine isn't exported and is instead bought by Boeing the value of the engine is not explicitly counted in GDP (hence final goods and services). Best you can say is that if the engine weren't made here it would need to be imported which would subtract from GDP.
Singapore is highly prosperous. How many jet engines do they produce? There's more than one way to prosperity and it's a mistake for you to shoehorn your vision of what it looks like into what GDP is actually measuring - the amount of goods and services produced in an area.
Capital gains, trades, etc do not contribute to GDP by definition.
Stuff trading firm employees buy with their salaries counts as GDP, but they mostly don't spend their money on the financial sector.
It's useful for measuring goods and services produced in an area and the material standard of living. It's not useful for comparing who makes more jet engines - there are simpler approaches for that.
But to address @RandomRanger's concern, the engine is implicitly counted in GDP. It's part of the value of the plane. That's also why an imported engine is subtracted from GDP - we want to only count the parts of the plane which were produced domestically.
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