Tag Archives: U.S. Economy

In spite of the recent reports of slow economic growth in Q1, Fannie Mae has maintained its forecast for GDP growth of 2.8 percent this year and its position that the economy will "drag housing upward." Fannie Mae chief economist and SVP Doug Duncan pointed out that the actuals as far as housing – existing home sales, new home sales, and prices – were either at or very close to their predicted levels during Q1, and mortgage purchase applications have been way up for the last couple of months.

In the ESR's April 2015 Economic Outlook released Monday, the projection for economic growth in 2015 held steady at 2.8 percent despite a downward adjustment for Q1 growth from the prior forecast. However, Fannie Mae is expecting some volatility in financial markets due to the Federal Reserve's expected interest rate increase later in the year.

While the Bureau of Labor Statistics reported real wage growth of 22 cents year-over-year in February up to $10.54 per hour, researchers from the Federal Reserve Bank of Cleveland have conducted their own study and discovered that real compensation growth and real wage growth since the end of the recession are slower compared with other recoveries.

Freddie Mac's April prediction for GDP growth of 2.6 percent is a slight decline from March's forecast of 2.8 amid disappointing incoming data from the first quarter and harsh winter weather. This did not put a damper on Freddie Mac's overall forecast for housing, however. In fact, the title of the report, "Great Expectations," indicated that analysts at Freddie Mac still believe 2015 will be the best year for housing since the pre-recession days.

After months of solid gains with the administration touting that the labor market is at its healthiest level since the turn of the century, payroll employment increases for March fell well short of expectations with just 126,000 jobs added, according to data released the Bureau of Labor Statistics on Friday.

In its first-ever analysis of the U.S. housing market released Thursday, Nationwide Economics indicated that the national market was at its healthiest level in 14 years.

In the third estimate for the nation's fourth-quarter gross domestic product (GDP) growth recently released, housing retained a 15.25 percent share of the 2.2 percent GDP growth, according to the U.S. Bureau of Economic Analysis.

The temporary factors that slowed economic growth include a drawdown in inventory, unusually high snowfall in some parts of the country, and the West Coast port slowdown. Fannie Mae expects the reducing of those factors in the second quarter combined with upbeat labor market conditions and positive consumer and business fundamentals to push GDP growth to 2.8 percent in 2015, ahead of 2014's pace of 2.4 percent.

Freddie Mac Deputy Chief Economist Len Kiefer, who will be a keynote speaker at the upcoming Five Star Government Forum in Washington, D.C., on March 18, predicted in Freddie Mac's March 2015 Economic and Housing Market Outlook that the coming year would be the best for housing since 2007, immediately prior to the crash.

While Fannie Mae's February 2015 Economic Outlook released on Thursday predicted a boost for housing this year based on strong economic growth, consumers may not be quite convinced, based on two consumer sentiment indices released this week.