March 18, 2012
As an entrepreneur, review and keep track of US economic indicators and trends. With the latest report on US Job Recovery in February, many indicators are looking positive. A recent Bloomberg report cites positive trends in indicators such as the Gross Domestic Product, consumer confidence, the housing industry and interest rate figures.
Economic Indicators – Gross Domestic Product
The Gross Domestic Product (GDP) is the indicator of the market value of goods and services produced in the country through a specific period. The sources in the Bloomberg report estimate that GDP will grow by 2.2% for 2012 in the US, up from 1.7% in 2011. Good potential news in the country as recent manufacturing reports have been favorable. Also an emphasis on “Made in the US” strategy will help boost GDP as the focus may be away from many foreign manufactured or supplied goods.
Consumer confidence is the measurement of how positive, how comfortable the consumer is with the economy and their own personal finances. It is usually tied to growth in consumer spending in the economy. Business Week reported a rise in consumer confidence to a four-year high, and further stated a Bloomberg Consumer Comfort index rising. Improved industry sectors and employment may be the reasons behind a recent rise in consumer confidence.
Economic Indicators – Housing Industry
A Washington Post article is one of those reports pointing to positive trends, showing the housing market stabilizing and in some sectors, housing sales improving. With improvement in the housing industry, many other indicators such as employment, retail and material sales could improve. However, in a fragile economy many of these industries are linked, and so is growth. Factors such as the increasing fuel could have a negative impact on these recent housing market improvements.
Economic Indicators – Interest Rates
The Bloomberg report sources indicate that interest rates will remain steady and low over the next two years. This is potentially good news for entrepreneurs who will be looking to start-up new ventures and need commercial loans. This is also favorable news for existing businesses looking to expand and in need of additional funds. Within your financing mix, commercial loans take up the majority percentage of all financing. The low rates will help lower the overall cost of borrowing.
As an entrepreneur or business owner, carefully watch and review economic indicators and trends, as those indicators most likely signal potential impacts on your business and position in the economy.
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