Goldman Sachs has cut its first quarter GDP estimate to -1.9%.
The firm had previously expected a Q1 GDP decline of -1.1%.
On Twitter, Reuters’ Jamie McGeever noted that excluding the 2008-2009 crash, this would be the largest quarterly GDP contraction in 23 years.
The downward revision comes after yesterday’s Q1 QSS report from the U.S. Census, which provides national estimates of revenue for service industry firms.
Goldman said the QSS report calls into question the amount of health spending in the first quarter. Health spending accounted for about one-third of the estimated 3.1% increase in real personal spending, according to Goldman.
Goldman said it isn’t completely surprised by this potential revision, as anecdotal reports from health care companies suggested that health care spending in that period was actually quite weak.
The firm said that those anecdotal reports also imply a pickup in spending later in the Q1 and into the second quarter.
This chart from Goldman shows what the decline in health spending during the first quarter looks like following the QSS report.
The final Q1 GDP estimate will be released June 25.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.