Where GDP goes, consumers follow.

Yesterday the Commerce Department reported that the U.S. economy grew at a 0.7% annualized rate in Q1, below estimates of 0.9%. There were some positive underlying trends within the report, but the market took this as a disappointment.

The bigger worry is that the GDP report and the University of Michigan’s Consumer Sentiment – which measures how people feel about the prospects of economic growth and their own budgets – track each other.

Continue reading