Posted by: Michael Mandel on May 01
According to the BEA’s latest report, real personal consumption grew at a 1% rate in the first quarter. But once I take out the parts of PCE which don’t actually come directly from consumer pockets, the rest of real PCE actually shrunk at an 0.1% rate. The chart is here:
You can see the down bar on the far right.
This calculation updates the one I did for the “Consumer Spending Mirage” (which Brad DeLong was kind enough to highlight here). See also the BEA’s defense of imputations, which I assume was a response to my story.
To get these figures, I remove owner-occupied housing, unpaid financial services, and 85% of medical care from consumer spending. Owner-occupied housing and unpaid financial services are imputations, which means they don’t directly correspond to cash expenditures. And roughly 85% of medical care spending flows through Medicare, Medicaid, and health insurance companies, so once again not out of pocket.
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