WASHINGTON, Feb. 26, 2015 /PRNewswire/ -- The economy is
poised for a pickup in growth in 2015 amid a strengthening
employment sector, rising income growth, and declining commodity
prices, according to Fannie Mae's (OTC Bulletin Board: FNMA)
Economic & Strategic Research (ESR) Group. The labor market has
started the year on an upbeat note and is expected to lift consumer
confidence, in turn helping to boost consumer spending,
manufacturing activity, and the pace of the housing recovery.
Economic growth may face some headwinds as a strong U.S. dollar
weighs on the trade deficit. However, the economy is expected to
climb to 2.9 percent for the full year, up from 2.5 percent growth
in 2014.
"Our forecast calls for an increase in economic growth to 2.9
percent for 2015, which is a slight downward adjustment from our
prior forecast but solid improvement nonetheless," said Fannie Mae
Chief Economist Doug Duncan.
"Although we are beginning this year at a more modest pace compared
to the above-trend numbers seen at mid-year 2014, the country's
aggregate income has benefitted from the improving labor market,
which, combined with low gasoline prices, should help drive higher
auto sales and overall consumer spending throughout 2015."
"We expect housing to shift up a gear in 2015 following the
uneven and ultimately disappointing activity last year," said
Duncan. "Our forecast calls for a number of factors, including
strong hiring and income growth, stabilized housing affordability,
and modestly easing lending standards, to translate into improving
housing demand throughout the year. We continue to anticipate that
the Fed will begin to hike short-term interest rates later this
year, although weak global economic growth and geopolitical
headwinds will likely limit the rise in long-term interest rates.
We expect total home sales to increase by approximately 6.0 percent
for 2015, with total single-family mortgage production climbing to
approximately $1.2 trillion. Total
single-family mortgage debt outstanding should be relatively flat
this year before picking up gradually in 2016 and 2017."
Visit the Economic & Strategic Research site at
www.fanniemae.com to read the full February
2015 Economic Outlook, including the Economic Developments
Commentary, Economic Forecast, Housing Forecast, and Multifamily
Market Commentary.
Opinions, analyses, estimates, forecasts, and other views of
Fannie Mae's Economic & Strategic Research (ESR) Group included
in these materials should not be construed as indicating Fannie
Mae's business prospects or expected results, are based on a number
of assumptions, and are subject to change without notice. How this
information affects Fannie Mae will depend on many factors.
Although the ESR Group bases its opinions, analyses, estimates,
forecasts, and other views on information it considers reliable, it
does not guarantee that the information provided in these materials
is accurate, current, or suitable for any particular purpose.
Changes in the assumptions or the information underlying these
views could produce materially different results. The analyses,
opinions, estimates, forecasts, and other views published by the
ESR Group represent the views of that group as of the date
indicated and do not necessarily represent the views of Fannie Mae
or its management.
Fannie Mae enables people to buy, refinance, or rent
homes.
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SOURCE Fannie Mae