This morning’s advance (flash) estimate of GDP for the first quarter (usually subject to significant future revision) showed very weak growth dominated by spending on health services. Health services spending of $19.5 billion (annualized) comprised over one third of GDP growth. However, there was shrinkage in personal consumption expenditures on goods, private domestic investment, and exports. This meant personal expenditures on services grew almost twice as much as GDP growth. Growth in spending on health services amounted to a little less than one fifth of growth in services spending. Nevertheless, the quarterly growth in spending on health services indicates health services continues to consume a disproportionate share of (low) growth (Table I).
Last Friday’s release of the third estimate of Q4 Gross Domestic Product and annual GDP confirmed spending on health services grew at more than twice the rate of growth in non-health GDP in 2015.
For Q4, the third estimate significantly reduced the share of GDP allocated to health services from the previous second estimate (Table I). At $18.7 billion (annualized), growth in health services spending accounted for almost one fifth of GDP growth. This was sa much faster rate of growth (3.6 percent) than for non-health GDP (2.1 percent). Almost all Q4 GDP growth was in services, not goods. Personal consumption expenditure on goods actually dropped.
Today’s second release of Q4 GDP showed the production of goods actually shrank in the fourth quarter. As a result, the (annualized) $26 billion growth in health services spending accounted for 29 percent of GDP growth of $88.2 billion. It comprised 31 percent of services spending growth and 35 percent of growth in personal consumption expenditure (Table I). This means that health services spending continues to devour more of our budgets. The evidence continues to indicate Obamacare is not bending the cost curve.
Today’s advance release of Q4 GDP showed the production of goods actually shrank in the fourth quarter. As a result, the (annualized) $26.3 billion growth in health services spending accounted for 39 percent of GDP growth of $68.0 billion. It comprised 32 percent of services spending growth and 38 percent of growth in personal consumption expenditure (Table I). This means that health services spending continues to devour more of our budgets. The evidence continues to indicate Obamacare is not bending the cost curve.
Released on December 22, the third estimate of Gross Domestic Product for the third quarter indicates growth in health services spending is maintaining a disproportionate share of still slow GDP growth.
Spending on health services grew faster (4.8 percent, annualized, in current dollars) than spending on non-health services (3.9 percent) or non-health personal consumption expenditure (4.2 percent) from the second quarter (Table I). The growth in health services spending ($24.8 billion, annualized) accounted for 17 percent of all GDP growth ($146.5 billion), just under one fifth of personal consumption expenditure ($130.6 billion), and 29 percent of all services spending ($84.7 billion). Continue reading GDP: Health Services Growing Faster Than Personal Consumption Expenditures→
Today’s second estimate of Gross Domestic Product for the third quarter indicates growth in health services spending is maintaining a disproportionate share of still slow GDP growth.
Spending on health services grew faster (5.0 percent, annualized, in current dollars) than spending on non-health services (3.9 percent) or non-health personal consumption expenditure (3.0 percent) from the second quarter (Table I). The growth in health services spending ($25.1 billion, annualized) accounted for 17 percent of all GDP growth ($151.0 billion), one fifth of personal consumption expenditure ($130.2 billion), and 30 percent of all services spending ($85.5 billion). Continue reading GDP: Health Services Accounts for 30 Percent of Services Spending Growth→
Today’s advance estimate of Gross Domestic Product for the third quarter indicates growth in health spending is maintaining a disproportionate share of weak GDP growth. Commenters noted that the weak estimate was largely due to shrinking inventories. This explains why personal consumption expenditure (PCE) growth ($135.7 billion) was actually higher than GDP growth ($121.1 billion), quarter on quarter (Table I).
Last week’s third estimate of Gross Domestic Product for the second quarter confirms that growth in health spending might be moderating somewhat from its initial Obamacare fueled rush. Unfortunately, it is not a clear break in the trend of health spending consuming an increasing share of our national income.
Current GDP grew $264.4 billion, or 1.5 percent, from Q1 (Table I). One tenth of this, $25.2 billion was health services. At this rate, health services grow in line with their share of GDP. However, if we look over the entire year from 2014, Q1, we note a trend that seems to be persisting, despite last quarter’s moderate grow (Table II). At $110.13, health services spending accounted for 17 percent of GDP growth over the four quarters. The rate of growth was 5.69 percent, in excess of current GDP growth. Continue reading Health Spending Increasing Share of GDP→
Last week’s second estimate of Gross Domestic Product for the second quarter confirms that growth in health spending took a welcome break. Unfortunately, it is not a clear break in the trend of health spending consuming an increasing share of our national income.
When we compare 2015 Q2 to 2014 Q2 annualized spending, health care is still consuming a slightly disproportionate share of GDP. Health spending grew $106 billion, comprising 17 percent of the $632 billion change in GDP. GDP only grew 3.66 percent, while health spending grew 5.47 percent. Continue reading A Welcome Break – Moderate Health Spending Growth in Q2 GDP→
Where is your money going? Increasingly, the answer is health care. This morning’s third estimate of first quarter Gross Domestic Product (GDP) was not as awful as previously estimated – a real decline of 0.2 percent, not 0.7 percent.
The overall drop of $7 billion was driven by a decline in exports and nonresidential structures. Personal consumption expenditures increased by $58.3 billion. However, $48.1 billion of that was services, of which $24.2 billion was health care. Almost half the quarterly increase in personal consumption was health care.
This morning’s advance (flash) estimate of GDP for the first quarter (usually subject to significant future revision) showed very weak growth dominated by spending on health services. Health services spending of $19.5 billion (annualized) comprised over one third of GDP growth. However, there was shrinkage in personal consumption expenditures on goods, private domestic investment, and exports. This meant personal expenditures on services grew almost twice as much as GDP growth. Growth in spending on health services amounted to a little less than one fifth of growth in services spending. Nevertheless, the quarterly growth in spending on health services indicates health services continues to consume a disproportionate share of (low) growth (Table I).
Continue reading Flash GDP: Health Services Over One Third of GDP Growth 
