What's going on?

An important survey of US companies showed a big pickup in business activity in October. It could be the beginning of a �decisive shift� in the US economy to better growth (similar to the 2015 rate).

What does this mean?

If the growth of the world�s biggest economy is indeed accelerating, that�s a good thing for most people and companies. However, this data is very recent and raw (it�s called a �flash estimate�), and it needs to be confirmed with further data before we break out any balloons. Nonetheless, it�s encouraging to note that the survey showed the biggest uptick in service sector activity (e.g. restaurants, lawyers, healthcare) since November 2015 – the service sector makes up about 80% of the US economy. According to the survey provider, the data suggests the US economy has rebounded to the same growth rate it was experiencing last year.

Why should I care?

The bigger picture: Business confidence in the US might be back.
Survey respondents were the most positive on the future outlook for sales since the summer of 2015. Why the sudden improvement in attitude? It�s not entirely clear. According to the survey, spending by businesses� customers has reportedly picked up and �business confidence� has improved. That�s pretty vague � but so are the drivers of economic activity generally. When things are good, momentum begets momentum � and it�s not always possible to say exactly why.


For the markets: Good US economic growth is positive for the dollar, but the impact on stocks can be a little mixed.
It makes sense that the dollar would go up if the economy improves: money from international investors tends to move to where there’s improving economic growth. Domestically focused companies, e.g. retailers that sell mostly within the US or tech firms that mainly serve US companies, are most likely to benefit from a strengthening US economy. Companies that sell mostly overseas, however, will face headwinds from the higher dollar, which makes their exports more expensive versus companies from other countries. But, overall, an improving economy is usually good for stocks.