Weather and Health Care Efficiencies

The key factors in the first quarter GDP revision appear to be the severe winter weather of the period and larger than expected cost savings in health care. Neither factor represents a trend. Winter is over, and the severe winter weather ended before the first quarter did. The January 1 and March 31 dates for health care policy won’t recur. There are more dates to come as more provisions go into effect, but those are smaller and their effects probably won’t be seen in economic aggregate measures. Not that I expected to see such a large downward move in health care. It is worth noting that the amount of health care actually delivered jumped up in January with millions more people covered, but the efficiencies outweighed the added work.