“We Are Trying to Come Up with Theories”: The “Final” First Quarter GDP Estimate May Not Be So Final After All
This blog noted that Obamacare led the Bureau of Economic Analysis to make a seriously flawed estimate of health spending in the first quarter of 2014. Instead of an initial growth in Gross Domestic Product (GDP), and revised drop of one percent , the “final” estimate was a drop of 2.9 percent annualized, Well, according to the New York Times, there are still “baffling contradictions” in the data on health spending that might lead to a remarkable revision of the “final” estimate:
Behind that reversal were the results of a quarterly survey of service providers. The survey, conducted by the Census Bureau, asks 18,000 companies in 11 service industries about their revenue and expenses. Health care providers, including physicians and hospitals, reported a decline in revenue from the previous quarter.
Eventually, there will be a more comprehensive annual survey, which could change the numbers…Mr. Mandel, the B.E.A. economist, said the bureau was trying to figure out what happened. “On the why, I don’t have a clear answer,” he said in an interview. “We are trying to come up with theories.”
Stunned by the G.D.P. report, Mr. Maki [an economist at Barclays Bank] put together a model that uses other available data — hours worked, industrial production and new claims for unemployment insurance — to estimate G.D.P. In the past, he said, that model has done a reasonably good job of estimating the change in real G.D.P. going back to 1967. For the first quarter, it estimates a growth rate of 3 percent, rather than the official figure of a 2.9 percent decline. That is the largest discrepancy ever.
Here is a theory: Blame Obamacare. If the government’s own economists and statisticians cannot figure out what Obamacare is doing to health spending and the economy, what hope is there for ordinary citizens?
Further to blame Obamacare which I haven’t seen any one do in the MSM is the fact that there was an increase in 799,000 people working part time and a decline of 523,000 working full time. Wouldn’t that large rise be attributed at least in part to employers not wanting to take on the costs of FTEs.
It surely is. And those folks are not able to afford the co-pays and deductibles if they are in Obamacare plans.
“there are still “baffling contradictions” in the data on health spending that might lead to a remarkable revision of the “final” estimate”
How could there be such contradictions as opposed to any other quarterly estimate of GDP? The quote, “trying to come up with theories” does not instill too much confidence.
There definitely must be some discrepancy in the methodology. Or not enough information. For there to be little idea of how Obamacare is affecting spending and the economy, there is a major mishap.
“For the first quarter, it estimates a growth rate of 3 percent, rather than the official figure of a 2.9 percent decline. That is the largest discrepancy ever.
Any sudden change in the results from models that have worked in the past is a concern.
“Blame Obamacare”
Such a flawed policy that affects our economy on such a grand scale should be to blame. Especially when things are not as transparent as they should be.
What a strange situation this is! So, not only can the CBO not even score ObamaCare now that it has been implemented, but now economists do not even know how its affecting economic growth!
So, I’m guessing that the media’s claim that the low GDP number was the result of “winter” may not be correct either…who would’ve ever guessed that excuse wasn’t true?
Who knew that “winter” would be at its coldest in the first quarter of the year? You expect these forecasters to work miracles!