WASHINGTON — Here is the most interesting fact about the economy that you've never heard: Without health spending, the rest of the economy is barely producing more than it did in late 2007, just before the start of the Great Recession.
We've spent five and a half years struggling to get back where we were, and many industries are hardly making it.
This sobering insight comes from the Center for Sustainable Health Spending in Ann Arbor, Mich., which compares health spending to the economy's total output, gross domestic product (GDP). From December 2007 to June 2013, health spending rose a respectable 14.7 percent. Meanwhile, GDP grew a lowly 4.6 percent. Exclude health spending from GDP and its growth is only 2.7 percent.
Gasp! Health spending accounts for almost half the economy's meager overall gain.
The dry statistics help explain the economy's stubborn sluggishness. As weak as the economy has seemed, health spending makes it look better than it is. In the roughly five-sixths of the economy that isn't health care, companies are often straining to reach previous highs.
If you're a corporate executive or a small-business owner, you haven't had much reason to hire or invest, because — in many industries — there's been no net growth in more than five years.
Look at some conventional indicators, and that's what you find:
n Industrial Production: It's about 1 percent below its 2007 average, reports the Federal Reserve.
n Vehicle Sales: Car and light truck sales are predicted to hit 15.6 million this year, much better than the recession low of 10.4 million in 2009 but nowhere near the 17 million early in the 2000s, notes Susan Sterne of Economic Analysis Associates.
n Air Travel: The number of passengers for domestic and international flights, 742.7 million in 2012, was more than 4 percent below 2007 levels and continues to run behind in 2013, according to the Department of Transportation.