U.S. GDP: The Real Estate Economy

Interesting data that even surprised us.  The real estate sector is now the largest sector of U.S. economy.   Real estate is a sub-category of the BEA’s  industry group, Finance, insurance, real estate, rental, and leasing.   Could it be one of the many reasons why a real estate mogul now lives in the White House?  

Some inferences from the data:  1)  the U.S. economy is much more diversified than in 1950 and less dependent on manufacturing.   That can be interpreted as good or bad depending on where you sit;  2)  the U.S. is a FIRE economy.  That is,  Finance,  Insurance and Real Estate,  which now exceeds 20 percent of GDP;   3) Agriculture continues to decline as a share of GDP, which is now only 1 percent of the economy.  This may change as “reefer” legalization becomes more ubiquitous and is counted in the official data;  4)  the Federal government’s role in terms of value added to the GDP is shrinking;  5)  State and local governments have almost doubled their share of output since 1950;  and 6)  Professional and business services have almost tripled their output as percent of the economy since 1950.   There are many more.  You decide and analyze.

One last point.  Real estate is all about leverage and, traditionally, highly dependent on credit and lending.


This entry was posted in Economics and tagged , , . Bookmark the permalink.

One Response to U.S. GDP: The Real Estate Economy

  1. Pingback: Reason You Need To Invest in Real Estate! | MPG Deals

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s