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Largest quarterly ACSI bounce in 25 years.
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Customer satisfaction increase drives big GDP growth from strong consumer spending in the U.S.
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Nevertheless, customer satisfaction remains at a low historical level.
Fueled by strong consumer demand, U.S. gross domestic product (GDP) grows 4.9% in the third quarter of 2023 well above most predictions and driven by a 4% increase in consumer spending. Customer satisfaction a major driver behind consumer spending — posts its largest increase in 25 years.
Since customer satisfaction impacts consumer spending — by far the largest component in GDP — American Customer Satisfaction Index (ACSI®) changes also affect GDP. A year ago, ACSI fell to its lowest point in nearly 20 years. For the first two quarters of that year, GDP growth was negative as well.
But the tide seems to have turned. ACSI leaps by 1.3% to a score of 75.1 (on a 0-100 scale) in the third quarter — in part due to customer satisfaction improvements in health care, which is up 8%, as well as nondurables and personal care products.
“The most fundamental tenet of a well-functioning market economy is that companies are rewarded for treating their customers well and penalized for treating them poorly”
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Amid the positive news, however, it is peculiar that portions of the economy do not seem to follow central patterns of the past. For example, a recession, which was predicted by many, has yet to materialize. High interest rates have not reduced consumer demand. Nor have they weakened the labor market. Over the past two years, another anomaly is that fewer of the high scoring ACSI companies have realized superior stock returns relative to their competitors.
“The most fundamental tenet of a well-functioning market economy is that companies are rewarded for treating their customers well and penalized for treating them poorly,” said Claes Fornell, founder of the ACSI and the Distinguished Donald C. Cook Professor (emeritus) of Business Administration at the University of Michigan. “This is still true with respect to customers, as companies with high customer satisfaction continue to have greater revenue growth than competitors with lower ACSI scores. Accordingly, the current stock market anomaly is unlikely to last.”
The national ACSI score (or ACSI composite) is updated each quarter based on annualized customer satisfaction scores for all sectors and industries.
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