Call it economic cognitive dissonance: Last week, on the same day that the U.S. reported economic growth of just 0.1 percent in the first quarter, a statement issued by the Federal Reserve began by saying that “growth in economic activity has picked up recently.” Policymakers acknowledged that while the cold winter had slowed growth, both the labor market and household spending had shown signs of improvement. One particular bright spot was a 10 percent increase in consumer health care spending driven by enrollment in the Affordable Care Act. The gain, measured on a quarterly annualized basis, was by far the largest in 34 years, according to Credit Suisse. That upsurge is likely to continue, too: the number of people enrolled has grown from 4.2 million at the beginning of March to over 8 million today, and officials say enrollees who signed up after February 15 will be counted in second quarter spending.
First published in The Financialist in 2014.
JENS ERIK GOULD
Jens Erik Gould is a political, business and entertainment writer and editor who has reported from a dozen countries for media outlets including The New York Times, National Public Radio and Bloomberg News.