By Dan Cook
Americans spent less on health services in the first quarter of 2014, contributing to a drop of nearly 3 percent in the real gross domestic product.
That’s the latest from the U.S. Department of Commerce’s Bureau of Economic Analysis, which releases information quarterly on GDP. GDP grew 2.6 percent in the previous quarter.
The bureau attributed most of the decline to a dive in consumer spending, much of it related to health care
. Imports grew during the quarter, but not enough to offset the consumer spending decline.
“The downward revision to consumer spending was mostly to services, especially to health care services,” the bureau said. It noted that it's recent estimates of health care spending
are very likely more accurate than past estimates, because it changed the way it gathered data.
“The revision to health care services reflected the incorporation of newly available Census Bureau quarterly services survey data for the first quarter. The QSS data reflect the revenues of for-profit and nonprofit hospitals, physician offices, nursing homes, and other health care providers and the expenses of nonprofit hospitals and other nonprofit health care providers. Prior to receiving the Census QSS data, BEA used information on Medicaid benefits and on Affordable Care Act
insurance exchange enrollments to prepare the previously published estimates of health services,” the bureau said in a release.
Health care spending wasn’t the only downward driver.
“Exports of goods were revised down, reflecting revisions to industrial supplies and materials and to foods, feeds, and beverages. Exports of services were also revised down,” the bureau reported. “The downward revision to exports reflected downward revisions to both services and goods, which were based on revised Census goods data for January through March and the annual revision of the international transactions accounts, which was incorporated on a best-change basis.”
In other discouraging news, the BEA said corporate profits declined 9.1 percent in the first quarter, after moving up 2.2 percent in 4Q13.
“The decline was the largest since the fourth quarter of 2008,” the bureau said. Meanwhile, prices rose by 1.3 percent for gross domestic purchases—defined by the bureau as “the prices paid by U.S. residents for goods and services wherever produced.”
Originally published on BenefitsPro.com