U.S. Warfare Boosted Q2 GDP Massively

Earlier we highlighted how over half of Q2’s 1.6% GDP growth could be explained by government spending. The government contributed +0.86% to the Q2 figure based on data from the Bureau of Economic Analysis (BEA). You can see how Q2 GDP growth was unusually reliant on government spending here.

As a follow up to that post, we’ve now broken out the different types of government contributions to Q2 GDP, and it turns out that defence spending was a massive component, accounting for +0.39% of the total 0.86% government GDP contribution.

Meanwhile, state consumption actually fell, sub tracing 0.10% from US GDP growth. You can see the breakdown below. Note that the numbers don’t add up to precisely 0.86% due to rounding. All data is from the BEA.

So a large part of Q2 GDP performance, +0.39% compared to the 1.6% total GDP growth for the U.S., was thanks to wars and general defence.


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