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applegrove

(118,674 posts) Fri Mar 29, 2013, 09:56 PM Mar 2013

"More Signs of Sturdy Growth: Consumer Spending Rises"

More Signs of Sturdy Growth: Consumer Spending Rises

CNBC/Reuters

http://www.cnbc.com/id/100602967

"SNIP...............................................

U.S. consumer spending rose in February and income rebounded, further signs economic activity accelerated in the first quarter, even though part of the increase in consumption reflected higher gasoline prices.

The Commerce Department said on Friday consumer spending increased 0.7 percent last month after an upwardly revised 0.4 percent rise in January. Spending had previously been estimated to have increased 0.2 percent in January.

Economists polled by Reuters had expected spending, which accounts for about 70 percent of U.S. economic activity, to increase 0.6 percent last month.

After adjusting for inflation, spending was up 0.3 percent after advancing by the same margin in January.

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"More Signs of Sturdy Growth: Consumer Spending Rises" (Original Post) applegrove Mar 2013 OP

Consumer Spending is *Not* 70% of GDP HiPointDem Mar 2013 #1

That is an important distinction. For sure more people are on medicare now. applegrove Mar 2013 #2

HiPointDem

(20,729 posts)

1. Consumer Spending is *Not* 70% of GDP

Reply to applegrove (Original post)

Fri Mar 29, 2013, 10:05 PM

Mar 2013

As a textbook author, there are few things that frost me more than hearing “consumer spending is 70% of gross domestic product,” because it perpetuates two very large and very misleading untruths.

First, the category of “personal consumption expenditures” includes pretty much all of the $2.5 trillion healthcare spending, including the roughly half which comes via government. When Medicare writes a check for your mom’s knee replacement, that gets counted as consumer spending in the GDP stats.

At a time when we are wrangling over health care reform, it’s misleading to say that “consumer spending is 70% of GDP”, when what we really mean is that “consumer spending plus government health care spending is 70% of GDP.”

http://www.businessweek.com/the_thread/economicsunbound/archives/2009/08/the_retail-impo.html

applegrove

(118,674 posts)

2. That is an important distinction. For sure more people are on medicare now.

Reply to HiPointDem (Reply #1)

Fri Mar 29, 2013, 10:13 PM

Mar 2013

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