Posted by Heidi Schwartz
Economic growth took a hit in the first quarter of 2015 due to temporary factors, including the West Coast port strike and tough winter weather in parts of the country. Nevertheless, much of the economic activity expected at the beginning of the year should shift into the second quarter with growth strengthening in coming quarters, according to Fannie Mae’s Economic & Strategic Research (ESR) Group.
Upbeat labor market conditions and positive consumer and business fundamentals should push growth to 2.8 percent this year, while slowing global growth abroad, geopolitical events and increased financial volatility domestically due to speculation around the target fed funds rate loom as downside risks to growth.
“We continue to expect the economy to drag housing upward as we move into the second quarter. The economy is getting a boost from the strong employment numbers we’ve seen last year and at the start of 2015. When this employment growth partners with income growth and consumers experience a rise in their personal household income, we should see a similar boost in the housing sector,” said Fannie Mae Chief Economist Doug Duncan. “Overall, we expect an improving 2015 with continued economic growth bringing housing above 2014 levels.”
Visit the Economic & Strategic Research to read the full March 2015 Economic Outlook, including the Economic Developments Commentary and Economic Forecast.