U.S. Bureau of Economic Analysis (BEA) GDI and GDP reports

U.S. GDP Boosted by 14.9% Surge in Defense Spending, Largest Since 2003, Ahead of November Election

Oct 30, 2024, 03:01 PM

In the third quarter of 2024, U.S. GDP experienced a significant boost, primarily driven by a 14.9% increase in defense spending, marking the largest quarterly surge since 2003. This surge in federal government spending on national defense, which rose at the fastest pace in over two decades, contributed to the overall economic growth ahead of the November election. Specific categories within defense spending saw notable increases, including missiles at 26.6%, electronics at 15.8%, weapons support services at 25.7%, and transportation of materials, which skyrocketed by 277%. These developments have prompted discussions regarding the accuracy of previous predictions about Gross Domestic Income (GDI) and its correlation to GDP, with recent revisions showing that GDP and GDI have risen nearly in tandem since pre-COVID levels, at 9.3% and 9.4%, respectively.