Revised numbers show a drop in GDP. This was not good news, worst showing in 5 years.
But, it’s not quite as simple as it seems. There was some good news buried in the numbers:
Here’s the meat of it:
The big surprise in the first quarter was the dip in health-care spending. The U.S. spent $6.4 billion less on health care in the first quarter than in the last quarter of 2013. Government statisticians initially forecast a 9.9 percent increase in health-care spending—and what we got was a 1.4 percent decline. Considering all the millions of previously uninsured people who are gaining access to health insurance under the Affordable Care Act, how can they be shrinking so dramatically?
Health-care costs overall have been increasing more slowly in recent years compared with the pace before the 2007-09 recession. Slow growth in the price of health-care services combined with a decline in utilization—the amount of health care people consumed—in the first quarter. So lower costs and greater access translated into lower consumption. That’s a head-scratcher.