April 30 (Bloomberg) — A surge in health care spending that helped keep the U.S. economy from shrinking in early 2014 is likely to continue fueling growth in coming months as more Americans gain coverage for medical services.
A 3 percent gain in consumer outlays was among the few positives in the first quarter. Services spending rose at the fastest pace in 14 years as Americans paid higher heating bills and the rollout of Obamacare encouraged more people to see the doctor. Even so, the economy's total output of goods and services expanded at just a 0.1 percent annualized rate in January through March as a harsh winter kept business investment and homebuilding in check.
The president's signature health-care law should provide another boost to growth in the second quarter as more people seek medical care. The GDP figures count what consumers, insurance companies and government programs such as Medicaid spend on services including doctor visits and surgery.
"People who would have signed up at the last minute, you won't see that until April or May or some time after that," said Ben Mandel, chief of the federal branch of the government division at the Bureau of Economic Analysis.
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