⚠US government and consumer healthcare spending accounts for over half of GDP growth
This is a quite shocking statistics if we think about it for a moment
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I do not like measuring economic strength by using GDP growth due to many drawbacks of this metrics and the fact that it sometimes takes years to get the final number of it but this chart may really surprise you.
US consumer spending on healthcare services accounted for ~25% of the 3.1% GDP growth seen in 3Q 2024. Additionally, government spending reflected ~28% of the GDP growth in 3Q.
To put this differently, consumer spending on healthcare services and government spending contributed 0.79 and 0.86 percentage points, respectively.
As for the government contribution, this is not surprising as US spending and in effect budget deficit has been historically high over the last few years.
Regarding the healthcare spending this is quite shocking. It turns out that healthcare is the largest part of US households’ services expenditure which in general drive overall consumption.
Moreover, over 40% of private-sector job creation over the last two years has been in healthcare. Even from the allegedly 256,000 jobs added in December more than 110,000 came from healthcare, social assistance, and the government.
In other words, a material share of the US economic growth has been generated by illness.
What the heck is happening here?
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