>A recent article on CNNFI.COM stated that consumer
>spending accounts for 2/3rds of the economy--I am
>under the assumption that by "consumer", CNNFI means
>the American consumer.
>
>Am I wrong in this assumption? Or do economists count
>foreign trade differently? Are foreign conumers
>included in this number? If not, can we actually
>believe that American conumers by themselves acount
>for the 2/3rds?
Yup. Personal consumption is a bit over 68% of US GDP, up from an average of around 62% from the 1950s through the 1970s.
The classic equation is that GDP equals private consumption plus investment plus net exports (exports less imports) plus government investment and consumption (which excludes transfer payments, like Social Security checks). Here's the breakdown for the first quarter of 2001:
C 68.4% I 17.9% net X -4.0% G 17.7% total 100.0%
Doug