Chart of the Week: Proposed Tax Cuts Keep US Business and Consumer Sentiment High in October

Our US Economic Sentiment Indicator (US ESI) slipped from 6.0% to 5.8% in October, but official real GDP growth is unlikely to be this strong in Q4.

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The rate of economic growth implied by our US ESI, which distils information from numerous consumer and business surveys, has exceeded real GDP growth in each of the last four quarters. This is likely to continue for a fifth quarter in 2017 Q4, with real GDP growth likely to be closer to 4.0% (annualised). The prospect of large corporate tax cuts, as well as the global economic upswing, are keeping businesses confident. Consumer confidence has also been buoyed by the prospect of income tax cuts and a strong labour market.

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