President Donald Trump tweeted a link to our ShopFloor blog post on the record-high consumer confidence Tuesday evening. We are pleased to see he is a reader of the blog!
“The Conference Board said that consumer sentiment was at its highest level in nearly 17 years in November. The Consumer Confidence Index rose from 126.2 in October to 129.5, notching its best reading since December 2000…” https://t.co/iNOtT3K8Vn
— Donald J. Trump (@realDonaldTrump) November 28, 2017
— Donald J. Trump (@realDonaldTrump) November 29, 2017
But there is even more encouraging news on the economy.
Earlier today, the Bureau of Economic Analysis said that the U.S. economy grew by 3.3 percent in third quarter, extending the 3.1 percent gain seen in the second quarter. In addition, I am currently forecasting 3.5 percent growth in the current fourth quarter. If that materializes, the U.S. economy would expand by at least 3 percent for the third consecutive quarter—a feat that has not been accomplished in 12 years.
To be fair, real GDP growth for 2017 should be a more modest 2.3 percent, weighed down by soft 1.2 percent growth in the first quarter, and I am projecting 2.8 percent growth right now for 2018. Yet, there is upward potential in that forecast, especially with the global outlook trending in the right direction and with pro-growth policies are enacted, including comprehensive tax reform.
For their part, businesses and consumers are upbeat, buoyed by optimism about the economic outlook and the prospects for tax reform and other policy initiatives. The NAM Manufacturers’ Outlook Survey has averaged 90.9 percent through the first three quarters of 2017, the highest three-quarter average in the survey’s 20-year history, with robust expectations for sales, production, employment and capital spending seen over the next 12 months. Other manufacturing sentiment surveys have observed a similar uptick in activity in the sector, which has been a welcome development given the global headwinds seen over past couple years.
Americans have also been more confident in their assessments about the economy, jobs and income growth. Consumer confidence surveys from the Conference Board and the University of Michigan have both observed significant improvements in sentiment this year.
The Conference Board announced yesterday that its measure rose to a 17-year high in November, and the University of Michigan and Thomson Reuters competing data point notched its best reading since January 2004 in October, although it pulled back from that point somewhat in November. The boost in confidence and a stronger U.S. economy have also helped to propel stronger consumer sales, including robust purchasing over the Thanksgiving holiday season.