We Just Went Through the Worst Month Since the Great Recession

We Just Went Through the Worst Month Since the Great Recession

The Fiscal Times/iStockphoto
By Yuval Rosenberg

We already knew the economy really struggled over the first few months of 2015, with March being especially rough. A new report from economists at Macroeconomic Advisers shows just how bad a month it really was.

The forecasting firm, which tracks economic progress on a monthly basis rather than just a quarterly one, now says that GDP fell 1 percent in March. “This was the largest decline since December 2008, when the U.S. economy was in the throes of recession,” its update notes.

The Commerce Department initially estimated that GDP grew at a seasonally adjusted annual rate of 0.2 percent in the first quarter. An updated report, due May 29, is now expected to show that the economy actually shrank over the first three months of the year. J.P. Morgan economists have lowered their tracking estimate of first-quarter GDP from -0.8 percent to -1.1 percent based on data released over the last two days.

Related: Why So Many Americans Are Trapped in ‘Deep Poverty’

As we’ve written before, though, the downturn isn’t necessarily reason to worry about the fundamental health of the economy, or at least it shouldn’t stoke fears that we’re diving into another recession. As the Macroeconomic Advisers report explains, “A sharp decline in net exports more than accounted for the decline in monthly GDP, as resolution to the West Coast port dispute led to a surge in imports to well above the recent trend. As a result, they write, they believe the one-month plunge “overstates the underlying weakness in the economy.”

That’s not to say the economy is particularly strong, either. Both Macroeconomic Advisers and J.P. Morgan now forecast second-quarter GDP growth to come in at a tepid 2 percent annualized rate.

Quote of the Day: The Health Care Revolution That Wasn’t

Benis Arapovic/GraphicStock
By The Fiscal Times Staff

“The fact is very little medical care is shoppable. We become good shoppers when we are repeat shoppers. If you buy a new car every three years, you can become an informed shopper. There is no way to become an informed shopper for your appendix. You only get your appendix out once.”

— David Newman, former director of the Health Care Cost Institute, quoted in an article Thursday by Noam Levey of the Los Angeles Times. Levey says the “consumer revolution” in health care – in which patients shop around for the best prices, forcing doctors, hospitals and pharmaceutical firms to compete with lower prices – hasn’t materialized, but the higher deductibles that were part of the effort are very much in effect. “High-deductible health insurance was supposed to make American patients into smart shoppers,” Levey writes. “Instead, they got stuck with medical bills they can't afford.”

Congressional Report of the Day: The US Pays Nearly 4 Times More for Drugs

A pharmacist holds prescription painkiller OxyContin, 40mg pills, made by Purdue Pharma L.D.  at a local pharmacy
REUTERS/George Frey
By The Fiscal Times Staff

The House Ways and Means Committee released a new analysis of drug prices in the U.S. compared to 11 other developed nations, and the results, though predictable, aren’t pretty. Here are the key findings from the report:

  • The U.S. pays the most for drugs, though prices varied widely.
  • U.S. drug prices were nearly four times higher than average prices compared to similar countries.
  • U.S. consumers pay significantly more for drugs than other countries, even when accounting for rebates.
  • The U.S. could save $49 billion annually on Medicare Part D alone by using average drug prices for comparator countries.

Read the full congressional report here.

Chart of the Day: How the US Ranks for Retirement

Ken Bosma / Flickr
By The Fiscal Times Staff

The U.S. ranks 18th for retiree well-being among developed nations, according to the latest Global Retirement Index from Natixis, the French corporate and investment bank. The U.S. fell two spots in the ranking this year, due in part to rising economic inequality and poor performance for life expectancy.

About 90% of Trump Counties Have Received Trade War Farm Aid

FILE PHOTO: A combine drives over stalks of soft red winter wheat during the harvest on a farm in Dixon, Illinois
Jim Young
By The Fiscal Times Staff

President Trump won more than 2,600 of the nation’s 3,000-plus counties in the 2016 election, and residents in nearly 90% of those counties – or more than 2,300 – have received some level of aid from the administration’s Market Facilitation Program, a $16 billion effort that compensates farmers for losses incurred as a result of Trump’s trade war with China.

Drawing on a new report from the Environmental Working Group, The Washington Post’s Philip Bump says the data “show the extent to which [the farm] subsidies overlap with Trump’s base of political support.”

To be fair, about 80% of the counties Hillary Clinton won also received some degree of aid, Bump says, but there are many fewer of them, given the concentration of her supporters in urban areas.

Overall, residents in more than 2,600 counties in the U.S. have received payments from the farm aid program, with the heaviest concentration in the Midwest.

Number of the Day: $1.57

iStockphoto
By The Fiscal Times Staff

A new study from the Bipartisan Policy Center says that Medicare would save $1.57 for every dollar it spends delivering healthy food to elderly beneficiaries who have recently been discharged from the hospital. The savings would come from a reduction in the rate of readmissions to the hospital for patients suffering from a wide range of common ailments, including rheumatoid arthritis, congestive heart failure, diabetes and emphysema.

“If you were going to offer meals to every Medicare beneficiary, it would be cost-prohibitive,” said BPC’s Katherine Hayes. “By targeting it to a very, very sick group of people is how we were able to show there could be savings.”