In the United States, personal consumption expenditures is the largest of the four components of GDP. In a typical year, consumer expenditures will comprise about two-thirds of the economy; while investment, government expenditures and net exports account for the balance.
Consumer purchases reflect the ability and willingness of consumers to buy. Absent buyer ability or willingness, purchases will not be made.
Because consumer expenditures are important to the economy, markets closely monitor consumer confidence. The monthly "Index of Consumer Sentiment" published by the University of Michigan (UM), is one of the more important measures followed. The UM surveys 500 consumers regarding their attitude about current economic conditions and expectations.
The October Index of Consumer Sentiment established a two-year low, which was 4.4 percent lower than the previous month and 3.1 percent below levels a year ago. Perceptions on current economic conditions were a slight negative to consumer sentiment; 1.0 percent lower than September, but up 0.9 percent from last year. However, consumer expectations fell sharply; down 7.1 percent for the month and down 6.5 percent from a year ago.
The presidential election, increasing Obamacare premiums, higher rent costs, economic uncertainty and a host of other factors probably contributed to the decline in consumer expectations. The bullish first estimate for third quarter Real GDP could conceivably improve expectations later. Time will tell whether the lowered expectations will translate into lower actual expenditures.
Expectations are important in leadership, business, politics, sports, entertainment, ministry and relationships. High but achievable expectations motivate ourselves and our team. Low expectations are demotivating and will usually result in subpar performance. Management and communication of expectations is critical for high-performance individuals and organizations.
Christians should have positive expectations and outlook; but often do not. As followers of Christ, we have voluntarily substituted our limited abilities and perspective for His unlimited perspective, grace, power and love. We have been equipped with the Word which will never fail, and the empowerment of the Spirit of God which lives inside of us. Regardless of the situations and circumstances which fill our lives, we can overcome and bear fruit.
"I have told you these things so that in Me you may have peace. In the world you will have tribulation. But be of good cheer. I have overcome the world" (John 16:33, MEV).
"For with God nothing will be impossible" (Luke 1:37, MEV).
"We know that all things work together for good to those who love God, to those who are called according to His purpose" (Rom. 8:28, MEV).
Jesus taught that the answer to our prayers depends upon our expectations. We must align our focus with God's heart. Today's 24-7 news cycle can be dangerous to our souls if we allow unfettered continuous digital access. We cannot afford to lose focus. Expectations matter.
"Jesus answered them, 'Have faith in God. For truly I say to you, whoever says to this mountain, "Be removed and be thrown into the sea," and does not doubt in his heart, but believes that what he says will come to pass, he will have whatever he says. Therefore I say to you, whatever things you ask when you pray, believe that you will receive them, and you will have them'" (Mark 11:22-24, MEV).
As ministers of the gospel, we should:
- Encourage our flocks to have daily times of prayer and Bible study
- Encourage our flocks to at least pray informally throughout the day
- Teach wisdom in accessing the 24-7 news cycle
- Encourage discernment with news stories (some people get all of their news via Facebook)
- Encourage discernment when accessing information from other Christian sources
- Encourage our flock to seek the peace of God in all circumstances
- Encourage our flock to concentrate on the promises and faithfulness of God.
"Faith is a spiritualized imagination." —Henry Ward Beecher.
Dr. James Russell is a professor of economics and undergraduate chair of the College of Business at Oral Roberts University.
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