President Trump’s Secretary of Commerce, Howard Lutnick, is proposing to change the way government measures the overall health of the American economy by stripping government spending from its gross domestic product, or GDP, reports, a move that comes just days after a branch of the Federal Reserve suggested a sharp drop in GDP may be on the immediate horizon because of federal job cuts. 

“Governments have historically messed with GDP. They count government spending as part of GDP. I’m going to separate those two and make it transparent,” Mr. Lutnick said Sunday on Fox News. “If the government buys a tank, that’s GDP, but paying 1,000 people to think about buying a tank is not GDP. That is wasted inefficiency, wasted money, and cutting that, while it shows in GDP, we’re going to get rid of that.”

The proposal, however, has some experts warning it could distort a core measure of the economy’s health. Critics caution that removing government expenditures from GDP “could potentially complicate or distort a fundamental measure” of economic health, the Associated Press reported.

Traditionally, GDP includes government spending because policies like taxes, regulations, and federal programs significantly shape economic growth. The GDP reflects real impacts, such as job creation and business development — or, in the case of Elon Musk’s campaign to lay off tens of thousands of government officials, job losses.

The new move to alter how the GDP report is produced may have something to do with unexpected new projections last week from the Atlanta Fed’s GDPNow, which estimated that the economy will shrink at a 1.5 percent annualized rate in the first quarter of this year.

That’s a drop from a 2.3 percent increase just a week earlier, and fully into recession territory. The Atlanta Fed cited a drop in exports and consumer spending for the new lower estimate. A Monday update from the Atlanta Fed is now predicting an even further decline of -2.8 percent in the first quarter.

Two other GDP trackers suggest the Atlanta Fed may be off-base, however. The New York Fed is predicting growth of 3 percent in the first quarter, while the Dallas Fed sees growth at 2.4 percent in the same period. Asked about the Atlanta Fed’s tracker, the Chicago Fed president, Austan Goolsbee, said on CNBC that “we’ve had a very robust job market stabilized at what feels like full employment, so unless we get more observations in that style, I’d hesitate to call it a trend.”

Mr. Musk, who is the billionaire chief executive of Tesla and SpaceX, has been outspoken about his distaste for how the GDP report currently works. “A more accurate measure of GDP would exclude government spending. Otherwise, you can scale GDP artificially high by spending money on things that don’t make people’s lives better,” Mr. Musk wrote Friday on X.

Mr. Musk’s slash-and-burn approach to trimming federal agencies could lead to problems other than just forecasts. Tens of thousands of laborers could face layoffs, reducing household incomes and consumer spending — two critical drivers of the American economy. If people stop shopping, it’s not just the unemployed who suffer — businesses large and small could take a major hit.