Goldman Is Now Saying That Q2 GDP Growth Was Absolutely Massive

Goldman Sachs revised its estimate of second-quarter GDP growth to 4.7% on Thursday, based on new data from the Census Bureau's Quarterly Services Survey (QSS).

Stronger-than-expected healthcare spending growth led to the revised Goldman estimate of 4.7%, which was up 0.5% from the Bureau of Economic Analysis' second advance-estimate of 4.2%.

In the second quarter, the QSS forecasted a healthcare spending growth a 3% annual from the first quarter and increase of 3.7% year over year. That was a rebound from a -2% drop in the first three months of the year. Through the first two quarter of 2014, spending on healthcare and social assistance has increased 3.3% year-over-year, according to the Census Bureau's data.

Goldman made particular note of growth in nominal spending at hospitals, which increased at a 10.6% annual clip.

The report "showed a strong bounce-back in healthcare spending in Q2, following weakness in Q1," Goldman said in a research note Thursday.

"In particular, nominal spending at hospitals rose at a 10.6% annualized rate, quite a bit faster than the Commerce Department assumed in their first two estimates of Q2 GDP. Other aspects of the QSS were more similar to Commerce's assumptions."

Goldman also maintained its estimate of a 3.1% GDP growth in the third quarter.