What Americans Spent The Most Money On In The Third Quarter

Tyler Durden's picture

One month ago, when the BEA released its first estimate of the hurricane-impacted economy during the third quarter (which came in at a stronger than expected 3.0%)  we were surprised to report that according to the Department of Commerce, in the third quarter the biggest driver of marginal spending was car sales (technically Motor Vehicles and Parts), which increased by $15.6 billion to $463.5 billion. Which, as we said at the time and considering recent US and global automakers data, was paradoxical in light of the ongoing decline in overall sales in the second half of 2017, and it was far too early to expect the post-hurricane spending spree. It was also surprising because as Americans splurged on cars, they pulled back on gasoline purchases, which was the single biggest detractor to spending, subtracting a marginal $3.5 billion in PCE, to $283.6 billion.

 

In any case, we concluded by saying that "we now await for the revisions to this initial estimate over the coming two months, because something tells us that the auto spending spree will be thoroughly revised well lower."

One month later, when the BEA released its second Q3 GDP estimate, it appears we were right: the contribution from motor vehicles was indeed revised lower, but not nearly as dramatically as we expected, only from a marginal increase of $15.6 million to $13.5 million.

And yet, many other line items did see a downward revision, which means that something had to increase sharply to compensate for the downward revisions among other spending components. Sure enough, something did: the old faithful "plug" which has saved the US economy every quarter for the past 4 years: Healthcare, or as it is better known, Obamacare, because with Trump failing to repeal Obama's signature health law, it means that Healthcare will merrily "contribute to GDP" for years to come, by being the single biggest marginal spending item for the foreseeable future.

Finally, for a comparison of how dramatically the contribution of "Healthcare" was revised higher, here is a chart showing side by side the change in spending among all key line items. One can almost hear the orders "from above" to make GDP 3% or higher at any cost when looking at this chart.

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BigWillyStyle887's picture

Obamacare is so fucking bullish for the economy it hurts bitchezzzzzzzz

Mimir's picture

Obviously not. Time to improve Obamacare and prevent insurance companies and pharmaceutical companies increasing prices. Prices should fall.

RU4Au's picture

Really? Sorry, but that's another vote for hopium. More, New and Improved government intervention will certainly make it all better?

Justin Case's picture

waivering towards socialism there, whew! Keep him on track, if not you'll end up like venezuela.

SDShack's picture

You cannot possibly be this stupid, so you have to be a troll. But just in case you are not, the first truth is 0zer0care was WRITTEN by the insurance lobby, FOR the insurance lobby. The entire law is full of subsidies and kickbacks for the purpose of increasing profits for the lobbies you mention. The reason prices are going up is by DESIGN. The greatest 0zer0 lie was always "You can keep your doctor, you can keep your plan, and 0zer0care will save the average family $2500/year". All proven to be false even before the law was actually passed, and completely proven to be a total lie once the law was implemented. 0zer0care is WORKING EXACTLY AS IT WAS INTENDED!

bpgnp210's picture

Healthcare spending, healthcare spending per capita and healthcare cost inflation were increasing before Obamacare and continue to increase after (some links to charts linked below).  Repealing the ACA isn't going to decrease anyone's individual healthcare cost, although it will eliminate the "fine" for those who choose not to buy insurance.... so when those that do not have insurance go to the hospital they can spread their bad debt across those that do have insurance... or the Fed government picks up the tab in the form as DSHs... which we pay in the form of taxes.  I am interested in your argument why repealing the ACA (which I am fine with) will reduce HC costs.  I'm all for repealing the ACA but I think that's the wrong diagnosis for what's increasing healthcare costs.

https://fred.stlouisfed.org/graph/?g=fVLt

https://fred.stlouisfed.org/graph/?g=fVLB

 

LikeyMikey's picture

Government with their paws in Haelthcare is what is causing rising costs.  Medicare controlling costs, Medicaid controlling costs and regulation for bringing new drugs to market are all driving prices higher.  Getting uncle sugar out of the mix will drive prices down.

Want proof?  Look at three scenarios and make your own decisions......

1) American Indian "Guaranteed Healthcare" paid 100% by the US Federal Government

2) Medicaid and Medicare which controls (distorts) prices in the market which then drives up costs to the private healthcare providers and Insurance companies

3) Cosmetic Healthcare which has no personal insurance or government programs. Prices continue to go down while quality goes up

 

Think about it... when is the last time that Government intervention has EVER Lowered prices and inproved quality with anything?

Government is NOT the answer unless it is to get them out of the way!

 

bpgnp210's picture

Didn't follow your "American Indian" comment but your cosmetic surgery comment is interesting.  I think its a little more complicated though.  It would be interesting to see the inflation in services that have been around for decades vs. the inflation due to the options/number of treatments for everything from a hangnail to a heart condition that didn't exist decades ago.  I've never seen that data.  Overall our population is getting fatter... a lot fatter and we're pumping more drugs in them so they live longer.......that's not going to lower costs.

 

Silver Savior's picture

Don't count on me. I never buy insurance. Silent protest against greed and high prices. Plenty of other people buy it though. Not sure why.

Dante Inferizzo's picture

You will need it layTer. If yOu are HealThY NoW dOn'T woRrY sO mUcH.

Miffed Microbiologist's picture

You must be self employed. At least in California employers require proof of insurance.

I work in a hospital system that provides stellar car for an affordable cost. I am healthy but my husband has a chronic disease. I have no option but to stay at my job which is unfortunate because I wish to leave Cali. We'd be bankrupt if we had no insurance covering his treatment.

Miffed

Silver Savior's picture

I work for one of the largest corporations in the world in California and never had insurance at all. Not sure what you are talking about. You don't have to have insurance to be employed. If that was the case that would really be bad. I would not work at all. 

lasvegaspersona's picture

Okay, Okay....we just make this shit up!...Haven't you ever had a deadline you could not meet?

GUS100CORRINA's picture

What Americans Spent The Most Money On In The Third Quarter

My response: OBAMACARE is BLEEDING the NATION DRY!!!!!!

This NEEDS TO BE FIXED ASAP.

RU4Au's picture

"This NEEDS TO BE FIXED ASAP"

 

This NEEDS TO BE REPEALED ASAP!

 

Fixed it for ya.

venturen's picture

Drain the Obamacare Swamp...Obama was a bad infection!

ZH Snob's picture

obama was the kind of president that just keeps giving, I mean taking.

spastic_colon's picture

fixing your own car is in vogue............

itstippy's picture

Calling Aunt Tippy in tears and arranging to have Uncle Tippy loan you his old Ford Ranger for four days while he fixes the head gasket on your Corolla is in vouge.  How do I get talked into this shit?

youngman's picture

I am sorry but rising healthcare costs is NOT good for the economy....

macholatte's picture

You are correct in that such an increase in the cost of living is not good.

However, it's NOT health care....... it's insurance.

There is no correlation among health, care and insurance.

That's the scam.

 

venturen's picture

well it depends...if you are a doctor receiving a million a year at a NON-PROFIT hospital or a Drug Company executive or investor....it is AWESOME.

Who cares if people live!

resistedliving's picture

do you see "a million a year"?  It's Pharma man and our addictive personality

Average U.S. Physician Salaries by Specialty

 

Allergy and Immunology $296,705   Anesthesiology $357,116   Cardiology $436,849   Colon and Rectal Surgery $343,277   Dermatology $400,898   Emergency Medicine $320,419   Endocrinology $217,610   Family Medicine $227,541   Gastroenterology $379,460   General Surgery $360,933   Hematology $376,660   Infectious Disease $205,570   Internal Medicine $223,175   Medical Genetics $158,597   Medicine/Pediatrics $205,610   Neonatology/Perinatology $290,853   Nephrology $306,302   Neurology $243,105   Neurosurgery $609,639   Nuclear Medicine $290,639   Obstetrics & Gynecology $315,295   Occupational Medicine $229,450   Oncology $341,701   Ophthalmology $343,144   Orthopaedic Surgery $535,668   Otolaryngology (ENT) $369,790   Pathology $302,610   Pediatric Cardiology $303,917   Pediatric Emergency Medicine $273,683   Pediatric Endocrinology $157,394   Pediatric Gastroenterology $196,708   Pediatric Hematology & Oncology $192,855   Pediatric Infectious Disease $163,658   Pediatric Nephrology $183,730   Pediatric Pulmonology $218,106   Pediatric Rheumatology $200,027   Pediatrics $206,961   Physical Medicine/Rehab $278,283   Plastic Surgery $407,709   Preventive Medicine $270,888   Psychiatry $227,478   Pulmonology $317,323   Radiation Oncology $418,228   Radiology $404,302   Rheumatology $244,765   Thoracic Surgery $471,137   Urology $381,029   Vascular Surgery $428,944
GunnerySgtHartman's picture

ObamaCare, like the in-law that just won't leave ...

shankster's picture

The loud, rude, obnoxious in-law that runs the electric bill up and raids the refrigerator.

Silver Savior's picture

The gov should pay all our car expenses so we have money for other things like rent hyper inflation. Better yet the gov should pay that too. It's all just basic needs.

Justin Case's picture

a sprinkling of moar socialism?

Silver Savior's picture

Could be but at this point what do we have to lose. I actually wanted Bernie to be president. I also have a vote Bernie 2020 bumper sticker on my car.

GunnerySgtHartman's picture

Why should I pay for your car when I'm already paying for public transportation (along with my own car)?

Justin Case's picture

GDP looks suspicious to me. Tha's not a little error, that's a massaged number for projecting growth that is not real. Extend and pretend.

shankster's picture

Repeal the individual mandate.

Consuelo's picture

 

 

They can't...

And that was known the moment that Mr. Roberts (goes to Washington...), gave the nod to the 'tax', based upon the catch-all commerce clause...

Which was probably more like:

'Hey John, we have some video of you and your little twink on the side, so --- might be best for you to do the right thing, Ok...?     See you at the dinner party...!!'

J J Pettigrew's picture

Obamacare is not healthcare.....it is health insurance

and health insurance is lowly weighted in the CPI

why is it weighted with firewood and magazine prices? two non essentials?

Bill of Rights's picture

Personal consumption...Keep eating those Carbs folks, its a one way trip to the emergency room...

lasvegaspersona's picture

This is probably not the right place for such scolding but you are correct.

Intermittent fasting (pick your favorite plan) and reduction of carbs can lead to less insulin resistance (which is Type2 diabetes). Lose that gut and reduce your med count and prolong your productive healthy life...may even help with mental function in later years.

Most of my patients simply will not do anything that is hard. The idea of skipping a meal is impossible.

For those with a modicum of discipline (hey it isn't easy but you don't reaaly suffer saying no to a donut) the rewards are great.

Angry White Guy's picture

Only a fat ass would down vote this.

Dead Indiana Sky's picture

And a relatively fit guy like myself gives you an up vote for that one.

Kefeer's picture

A liberal would just for fun.  A fat liberal hits it twice and locks up their screen.

Drater's picture

This is the truth...went low carb and only 2 meals/day about 2 years ago and now I'm down to 165 lbs at 51 years old. Also went from 30 drinks/week to about 2/week after starting 10mg edible THC everynight which makes me sleep like a baby. I've haven't felt this good since my early 20s.

Dontblamethegoat's picture

And stop drinking alcohol permanently ... 

 

Kefeer's picture

If you like your diabetes, then you can keep your diabetes.

Genby's picture

What is hiding behind "other non-durable goods"? Drugs?

max2205's picture

govt tells you what to buy and how much you'll pay... shut the fuck up!!

FreeNewEnergy's picture

Healthcare basically tripled from the first estimate to the second, from ~$7 B, to ~$21 B.

So, are these estimates really any good.

Consider, if you had a business, and your managers came in with estimates on their individual sectors, and one was triple the previous estimate, would you be suspicious of that manager, and, by extension, all of the managers?

Using that metaphor, I'd say all the figures used in calculating GDP (a poor estimation of the general health of an economy, IMO) are suspect. Further, possibly all stats and guesses by .gov are fudged, goal-seeking, or otherwise "massaged."

I don't believe any of their lies. 

Kefeer's picture

Here is the perfect reason not to ever believe a lie; except to believe it is a lie.

Obama on lower premiums. (2min 39 sec YT)

If you want a long reminder, this is a compilation of Obama's lies and is 12 minutes.

Expat's picture

Wow, a politician who lies?  Of course, if you were to make a similar tape of Trump, it would last about six months.

Kefeer's picture

And if one were made about you?  BTW - there is one on you and each of us to whom we will be accountable, for if you are a creature (and you are) living in a creation (and we do), then you have what?  A CREATOR - Law of Cause and Effect where God is the First Cause.

If you live in a house, then there is a what?  A builder.