An analysis of the 1.4 percentage point GDP growth in the second quarter of this year by the Bureau of Economic Analysis tells us that a steady increase in private consumption along with exports and nonresidential fixed investment were responsible for the economic growth in the first half of 2016.
The largest increase in consumer spending since gas prices have dropped, according to Aneta Markowska, economist at Societe Generale has been on healthcare.
“Since the Affordable Care Act’s main coverage provisions took effect at the beginning of 2014, expanded coverage is accelerating our recovery from the Great Recession by increasing families’ demand for health care goods and services and reducing their out-of-pocket medical costs, which frees up money to meet other pressing needs.” says Jason Furman, Chairman of Council of Economic Advisers.
“In nominal terms, household spending on healthcare averaged 3.9% between 2010 and 2013. It began to accelerate in the first half of 2014 and has averaged at 5.2% since then. Importantly, this pickup in healthcare spending was not driven by higher costs; real spending in this category accelerated from 1.9% in 2010-2013 to 3.9% thereafter. This would indicate that Americans have not only been spending more because of increased costs, but also intentionally allocating more of their wallet to the sector ” says Aneta Markowska.
“To match the increased spending, the healthcare sector’s labor market has also been booming” notes Aneta. According to the Bureau of Labor Statistics: the healthcare sector produced about 240,000 jobs per year between 2010 and mid-2014, since then, it has averaged at 354,000/year and the sector is currently producing about 500,000 jobs annualized. Over the past 12 months, health care has added 445,000 jobs.