BREAKING: US economy shrank at 2.9 percent annual rate in first quarter

The first quarter as worse than original estimates.

Are we heading toward recession again?

 

Most of the analysis I've read seems to attribute the first-quarter slowdown primarily to a devastating winter.

 

Austerity has consequences.

 

http://www.bloomberg.com/news/2014-06-25/economy-in-u-s-shrank-in-first-quarter-by-most-in-five-years.html

Consumers returned to stores and car dealerships, companies placed more orders for equipment and manufacturing picked up as temperatures warmed, indicating the early-year setback was temporary. Combined with more job gains, such data underscore the view of Federal Reserve policy makers that the economy is improving and in less need of monetary stimulus.

The first-quarter slump is “not really reflective of fundamentals,” said Sam Coffin, an economist at UBS Securities LLC in New York and the best forecaster of GDP in the last two years, according to data compiled by Bloomberg. “For the second quarter, we’ll see some weather rebound and a return to more normal activity after that long winter.”

The other interesting thing is that there was an expected boost in health care spending, figuring all the newly insured on Obamacare would rush to the doctor. That didn't happen.

The revision reflected a drop in spending tied to health care services. The Bureau of Economic Analysis had estimated that major provisions of President Obama’s signature health care law would boost outlays. A quarterly services survey released this month showed the assumptions were too optimistic. Outlays for health spending actually slowed in the first quarter, subtracting 0.16 percentage point from GDP. The Commerce Department previously estimated those outlays added 1 percentage point to GDP.

If many of those plans are HSAs, the pattern will be that health spending will slowly rise as the year goes on, and then REALLY go up in the fourth quarter, when people have banked enough money to pay for services beyond the preventive stuff that, by law, does not come out of their own pocket.

 

Just negotiated next years rates for company health care plan. Was able to
keep increase to a minimum. $500 per month per employee or $6500 per year.

Will likely cut 2 positions but all things considered it could have been worse.

 

You bastard!

 

You should have just sold your yacht ...

 

I bought a house. I did my part.

 

Person B would be pissed!

 

Yeah, but for the first time in a while, you had no divorce lawyer bills.

 

I had uncontested divorces. Marriage and family are WAY more expensive - like a giant Ponzi scheme.

 

Tsk, tsk ... I can't believe your selfishness in not having children, thereby preventing your local school district from receiving more badly needed resources.