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U.S. Consumer Confidence Rises with Economic Growth

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The economies of the world’s nations are on a slow stroll while America has quickened its pace to a leading role as one of the only bright Northern lights for others to follow. Improvement is so significant that GNP has been revised upward from 3.5% to 3.9% ( As cited in CNN Money ). Other nations are increasingly concerned about lower inflation and the potential for deflation. The U.S. is doing so well it may start to raise interest rates in alignment with growth. Americans are becoming increasingly positive about their future prospects within the economy. According to a recent gallop poll consumer confidence rose to -7 which is the highest it has been in 17 months ( Gallop, 2014 ).   The poll is a combination of how people view the economy. According to the poll 24% said the economy is excellent while 30% said it is poor leaving the total balance at -7.  The U.S. economy is also moving forward with some of that growth coming from lower energy and oil costs. Morgan Stan

Does Improvements in Consumer Sentiment and GNP Indicate Future U.S. Growth?

The University of Michigan recently announced improvements in consumer sentiment from 80 in March to 84.6 in September ( 1 ).   Consumers who have been frugal with their pay checks over the past may now be willing to open their wallets. Increased consumer spending matched with improvements in Gross National Product (GNP) could be a good sign for the economy.  Consumer sentiment and sales are two different things but certainly positive impressions today can lead to increased sales tomorrow.   According to Gelper, et. al. (2007) positive consumer sentiment is followed by increased purchases of products and services in the trailing 4-5 months. They argue that consumer sentiment maintains some predictive power over consumer spending.  Another complementary announcement by the Commerce Department posted a rise in Gross Domestic Product (GDP) to 4.6% ( 2 ).   Positive GNP numbers were realized from personal consumption expenditures, exports, private inventory investment, state a