Americans may find themselves in better moods as revised reports find that the nation's Gross Domestic Product has not only been increasing in recent months but is even higher than last month's original findings.
The U.S. Department of Commerce released revised third quarter data reporting that the increase of GDP from last quarter was the greatest since 2009, with a jump from 1.3 percent to 2.7 percent since the second quarter. Rising GDP, especially rising personal consumption, often signals a growth of consumer confidence. As economic confidence continues to grow, banks and other loan originators may find themselves with more potential borrowers.
The increase is largely attributed to rising residential fixed investment, personal consumption and government spending. While imports rose compared to what was reported last month, exports also grew by a larger amount. With more jobs added, unemployment claims also fell since last month, but fell by rates larger than economists expected. While not at pre-recession levels, the unemployment rate continues to be shrinking.
Private inventories also contributed largely to the increase in GDP. This could, however, backfire next quarter if larger inventories cause businesses to slow down production. Hurricane Sandy's effects on unemployment and consumer spending may also come into play in next quarter's GDP, and fears of the upcoming "fiscal cliff" tax increases also remain to be seen.
While an overall increase in GDP, nonresidential investment spending, which includes what companies spend on equipment or buildings, also fell slightly.
The growing spending by consumers and decreasing unemployment rate suggest a further increase in home and other purchases. For companies that may see a growth in loan applications, application processing software can help loan originators process loans efficiently, especially with the uncertainty of the market.