Forced Obamacare spending by consumers saves U.S. GDP from a negative Q1

On April 29, the Bureau of Economic Analysis issued the 1st quarter results for GDP growth in the U.S. economy.  And unlike faulty predictions made over the past three months by analysts in the mainstream, who as a while had consensus forecasts of between 1.8 and 3%, the final tally came out as .02%, and just barely above negative growth and recessionary indicators.

But what made this number completely skewed was that for the fourth quarter in a row, Obamacare forced premiums was the number one consumer expenditure, and without a stockpiling of inventories (not actual sales) the GDP number would have been a – 2.6%.

Moments ago the BEA reported that Q1 GDP was far worse than almost everyone had expected, and tumbled from a 2.2% annualized growth rate at the end of 2014 to just 0.2%, in a rerun of last year when it too “snowed” in the winter.  This was well below the Wall Street consensus of a print above 1.0%.

Which is why a quick look at what said Joe spent in the harsh winter reveals something stunning: no, not that the most consumed “service” was again healthcare – mandatory spending on Obamacare will be with us for a long, long time, “boosting” the US economy by this mandatory spending item.

The only good news: the massive inventory build, the largest since 2010, boosted GDP by nearly 3.0%. Without this epic stockpiling of non-farm inventory which will have to be liquidated at some point (and at a very low price) Q1 GDP would have been -2.5%. – Zerohedge

Personal consumption q1

Real economic growth in a consumer economy is based primarily on spending tied to discretionary income, not necessities like food, transportation, housing, and healthcare.  And with wages only rising by a couple pennies per hour over the past year, American’s are staying out of the growth economy since their stagnant earnings are being eaten up by inflated prices and forced mandates from the government.


There is a reason why oil and manufacturing inventories are at near record highs… and it doesn’t take a Nobel Prize winning economist to come to the right conclusion that the economy has not recovered since the 2008 credit crisis, with each new GDP print much worse that believed when the raw data is studied versus the surface number.  And all the jawboning about a strong dollar, bad winter, and global recession aside, when the American people spend the vast majority of their income on necessities required just to stay alive, the bottom line is a decline and loss of jobs and businesses elsewhere since one cannot stay open when profit margins are no longer feasible in an environment of lower sales and price inflation.

Kenneth Schortgen Jr is a writer for,, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.

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