Lutnick Remarks on Removing Government Spending in GDP Data Raises Fears

Comments from a member of President Trump’s cabinet over the weekend have renewed concerns that the new administration could seek to interfere with federal statistics — especially if they start to show that the economy is slipping into a recession.In an interview on Fox News on Sunday, Howard Lutnick, the commerce secretary, suggested that he planned to change the way the government reports data on gross domestic product in order to remove the impact of government spending.“You know that governments historically have messed with G.D.P.,” he said.“They count government spending as part of G.D.P.

So I’m going to separate those two and make it transparent.”It wasn’t immediately clear what Mr.Lutnick meant.

The basic definition of gross domestic product is widely accepted internationally and has been unchanged for decades.It tallies consumer spending, private-sector investment, net exports, and government investment and spending to arrive at a broad measure of all goods and services produced in a country.The Bureau of Economic Analysis, which is part of Mr.

Lutnick’s department, already produces a detailed breakdown of G.D.P.into its component parts.

Many economists focus on a measure — known as “final sales to private domestic purchasers” — that excludes government spending and is often seen as a better indicator of underlying demand in the economy.That measure has generally shown stronger growth in recent quarters than overall G.D.P.

figures.In recent weeks, however, there have been mounting signs elsewhere that the economy could be losing momentum.Consumer spending fell unexpectedly in January, applications for unemployment insurance have been creeping upward, and measures of housing construction and home sales have turned down.

A forecasting model from the Federal Reserve Bank of Atlanta predicts that G.D.P.could contract sharply in the first quarter of the year, although most private forecasters still expect modest growth....