Strong Q3 Growth Fuels Consumer Optimism

The economy grew at its fastest pace in two years during the third quarter, rising 2.9 percent. However, one might ask if this announcement is politically tainted – aimed at improving the image of the incumbent administration. Perhaps we’ll know soon enough.

The Commerce Department will make a “second estimate” of Q3 growth on November 29 – three weeks after Americans cast their vote for president. A downward revision will cast some doubt on why the initial estimate was so robust just days before polling booths open nationwide.

Economists polled by Bloomberg had predicted 2.6 percent growth for the third quarter. Business investment grew 1.2 percent while exports jumped 10 percent. Real GDP increased 1.4 percent.

“The acceleration in real GDP growth in the third quarter reflected an upturn in private inventory investment, an acceleration in exports, a smaller decrease in state and local government spending, and an upturn in federal government spending,” the Bureau of Economic Analysis said.

Consumer credit confidence is also up. A survey of more than 2,300 Americans who are new to credit or re-building their credit finds that 81 percent of respondents believe they will be able to improve their credit. Also, 82 percent are willing to do what it takes to improve their score. The Capital One Credit Confidence Study was published on Oct. 20.

“Achieving better credit is core to everyone’s financial health, and this study revealed that there is a strong spirit of optimism,” said Jennifer Jackson, Managing Vice President at Capital One, in a statement. “However, there is a need for more education and action for people to achieve credit success.”

Capital One’s study also finds that Americans surveyed are willing to sacrifice in order to build or restore their credit profiles, in part because a good score is viewed as key to unlocking the American Dream. Nearly a third (32 percent) of respondents would rather have “excellent” credit than receive one million dollars. And nearly 90 percent of 18-24 year olds would choose “excellent” credit over access to social media.

Americans use a wide range of terms to describe what credit means to them including opportunity (47 percent), flexibility (44 percent), achievement (21 percent) and exciting (18 percent).

Further strong economic indicators may increase the likelihood of a rate hike by the Feds next month. The unemployment rate remains steady at 5 percent.

Marvin Dumont
Word slinger at The Huffington Post, Entrepreneur and other outlets. Marvin Dumont holds two content certifications and earned MPA, BBA and BA degrees from the University of Texas at Austin.