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.

“You know that governments historically have messed with GDP,” Lutnick said on Fox News Channel’s “Sunday Morning Futures.” “They count government spending as part of GDP. So I’m going to separate those two and make it transparent.”

The U.S. economy grew at a faster pace than expected at the beginning of 2024 as consumers continued to open their wallets despite ongoing inflation and high interest rates. 

Gross domestic product, the broadest measure of goods and services produced across the economy, grew by 2.8% on an annualized basis in the three-month period from April through June, the Commerce Department said in its first reading of the data on Thursday. 

That is much higher than the 2% increase forecast by LSEG economists and the 1.4% pace seen during the first quarter. 

The U.S. economy grew at a 2.8% annualized rate in the second quarter—a faster rate than economists expected as consumer spending increased and businesses built up inventories, the Commerce Department said on Thursday.

Why it matters: The new data raises confidence the economy has achieved a "soft landing" — healthy economic growth alongside cooling inflation.

Economists expected an annualized growth rate of 1.9% last quarter. The economy grew at a 1.4% rate in the first three months of the year.

The U.S. economy accelerated in the second quarter as consumers increased their spending, businesses invested more in equipment and stocked inventories, and inflation cooled.

Gross domestic product—the value of all goods and services produced in the U.S., adjusted for inflation and seasonality—rose at an annual rate of 2.8% for April through June, the Commerce Department said Thursday. That was more than the 1.4% rate during the first quarter, and well above the 2.1% rate economists had expected before the report.

The American economy reads a little like a Dickens novel these days – and for Joe Biden, it’s in desperate need of a plot twist.

For more than a year, the narrative has been stuck between “best of times” data and “worst of times” sentiment. Unemployment has been incredibly low and consumer spending abnormally resilient. But consumers have proved dour, unwilling to give President Biden much credit because of the sting of recent high inflation and continuing sky-high housing costs.

The past two years have been very good for the U.S. economy. Unemployment has crept up a bit, but not by a lot, and the employed share of Americans in their prime working years is higher than, to make a random comparison, it was at any point during the Trump years. At the same time, inflation has come way down, defying the pessimistic predictions of many economists.

Economist Milton Friedman defined inflation as “too much money chasing after too few goods.” He could have just as easily described President Joe Biden’s economic agenda.  

For almost four years, Biden’s policies have flooded the marketplace with federal stimulus while squeezing the supply of goods and services through higher taxes and regulations. The result has been a cost-of-living crisis and an economy in decline.

US job growth shot much higher than expected in May, jumping to 272,000, while the nation’s jobless rate rose slightly and broke a 27-month streak of below-4% unemployment.

At a time when Americans and the Federal Reserve are clamoring for clear-cut data about the state and trajectory of the economy, Friday’s jobs report was much more opaque than everyone had hoped.

U.S. job growth accelerated again in May, defying expectations for a slowdown, even as the unemployment rate rose to the highest level in more than two years.

Employers added 272,000 jobs in May, the Labor Department said in its monthly payroll report released Friday, easily topping the 185,000 gain forecast by LSEG economists. But the unemployment rate unexpectedly inched higher to 4% against expectations that it would hold steady at 3.9%. It marked the highest level for the jobless rate since January 2022.

The U.S. economy added far more jobs than expected in May, countering fears of a slowdown in the labor market and likely reducing the Federal Reserve’s impetus to lower interest rates.

Nonfarm payrolls expanded by 272,000 for the month, up from 165,000 in April and well ahead of the Dow Jones consensus estimate for 190,000, the Labor Department’s Bureau of Labor Statistics reported Friday.