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According
to the “final” estimate by the Bureau of
Economic Analysis (BEA), 4Q2014 growth in real U.S. gross domestic product
(GDP ) was pegged at a seasonally
adjusted and annualized rate of 2.2% -- down nearly 0.5 percentage point from
the initial (“advance”) 4Q estimate, and 2.8 percentage points lower than 3Q’s
5.0%. Analysts had expected
a deeper revision to 2.1% (ranging from +2.1 to 2.6%). Personal consumption
expenditures (PCE) and private domestic investment (PDI) contributed to 4Q
growth, while net exports (NetX) and government consumption expenditures (GCE)
subtracted from it.
"The
growth rate in real GDP was the same as was estimated last month," the BEA reported, "primarily
reflecting upward revisions to exports and to personal consumption expenditures
(PCE) that were mostly offset by a downward revision to private inventory
investment."
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One
finds some disturbing facts when looking behind the headline numbers (hat tip Zerohedge):
Namely, that any savings consumers may have gleaned at the gas pump have been more
than spent on mandatory health insurance. AAA
estimates consumers saved $14 billion on gasoline during 2014 (roughly $12.7
billion in 2009 dollars).
“In
the final revision of 4Q GDP,” wrote the ZH author, “while virtually every
other category of household spending was largely unchanged or revised lower, it
was [the healthcare category], of which Obamacare was the biggest contributor at
the margin, that saw an unprecedented surge in total spending -- a bump of $13.9
billion (from $1.858 trillion to $1.871.9 trillion) -- just between the second
and final estimates of 4Q GDP!” I.e., the revised cost of health insurance just
in the final 4Q GDP estimate was greater than the savings consumers
experienced at the gas pump.
“It
gets better,” continued ZH: “Of the $89.1 billion increase in chained-2009-dollar
4Q GDP [relative to 3Q], healthcare was $35.3
billion of that, or 40% of the total. Yes, healthcare spending accounted
for 40% of GDP growth in 4Q!”
The foregoing comments represent the
general economic views and analysis of Delphi Advisors, and are provided solely
for the purpose of information, instruction and discourse. They do not
constitute a solicitation or recommendation regarding any investment.
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