What is the distributional sector?

What does it say about the US economy that the financial sector is the largest of all industries, at twice the size of the manufacturing sector?

• How does this impact a country's economy? Is it reasonable? Does it illustrate that the financial sector has become over-bloated? Is it a sign that the economy has drifted too far from sound economic principles? Is the economy too reliant on the financial sector etc.?

• Answer:

  It say three things: 1.  The first, if you include Real Estate with Insurance and Finances, you get a really big number. (FIRE) finance, insurance, real estate. 2.  It also says that the financial sector is a better exporter than the manufacturing sector. Possible because all financial products are now metric. ;-) http://www.investopedia.com/ask/answers/04/073004.asp 3.  It says the implicit assumption that percentage of GDP for the various economic sectors can tell us something useful about the health of that economy falls apart when we look at economies with  extensive exports, technological change and high capital intensity. The U.S. Financial Sector serves the whole world. It has competition from London, Hong Kong, Tokyo, Frankfurt, Shanghai, Singapore, Switzerland, and Toronto. (in rough order) The U.S. is restricted from doing business with Iran, Syria, Cuba, and North Korea. Companies in China, Brazil, Europe and other places want to be listed on the NYSE or NASDAQ, even if only as an ADR. U.S. manufacturing makes only about 22% of all the worlds manufactured goods.  It is relatively healthy. Contributing to U.S. manufacturing is a large advanced service sector, that provides design, legal, marketing and yes, software service to manufacturing. Many of those services used to be done in-house, and counted as part of manufacturing share of GDP. **** **** But if you want to look at  that data, and head toward conclusions like .... " ... does it illustrate that the financial sector has become over-bloated, is it a sign that the economy has drifted too far from sound economic principles, is the economy too reliant on the financial sector etc?  " I will answer, YES, exactly like the tiny share of GDP that farming has (Agriculture, forestry, fishing, and hunting)  indicates that American Agriculture is a disaster of biblical proportions, and soon all Americans will be starving. Which is a way of saying trying to use aggregate statistics like this may not be very useful. If we want to say some thing about an economic sector, it helps to look inside the box and compare it to sector in other countries. **** The UK has a more serious issue, with their financial sector being a very large slice of the their economy. http://fullfact.org/factchecks/does_banking_dominate_the_uk_economy-1512 http://www.theguardian.com/business/blog/2013/aug/13/banking-system-too-big-eurozone