While first half of 2017 underperformed only sightly, the second half holds greater promiseNew research and economic analysis form the Fannie Mae Economic & Strategic Research (ESR) . Visit fanniemae.com.
Group’s WASHINGTON, Aug. 17, 2017 /PRNewswire/ — Looming geopolitical tensions and the growing potential for a U.S. government shutdown as well as a technical default pose risks to the economy but are not expected to derail full-year growth of 2.0 percent, according to the Fannie Mae Economic & Strategic Research (ESR) Group’s August 2017 Economic and Housing Outlook.
The economy grew 1.9 percent on an annualized basis during the first half of the year, slower than the expected 2.1 percent in the prior forecast. However, the second-half outlook is slightly stronger, with consumer spending and business investment helping to support growth.
After subtracting sizably from growth last quarter, residential investment also will likely be a modest contributor during the second half of the year.
Economic Growth outlook remains at 2.0%
“We are keeping our full-year economic growth outlook at 2.0 percent as risks to our forecast are roughly balanced,” said Fannie Mae Chief Economist Doug Duncan. “On the upside, consumer spending growth might not moderate as much as we have accounted for in our forecast. A build-up in inventory also should be positive for growth this quarter and nonresidential investment in structures will likely continue to improve as oil prices stabilize.”
“In addition, the decline in the dollar and a pickup in global growth should support manufacturing and exports, although the outlook for the trade sector is clouded by uncertainty surrounding trade policy, ” Duncan said. ” Headwinds include tax policy uncertainty that could delay business investment, the risk of a partial government shutdown this fall if Congress fails to pass spending appropriations, a technical default if the debt ceiling isn’t raised, and an increase in global political unease. However, we believe these headwinds and tailwinds essentially net out overall, and we stand by our view that economic growth will remain on track for 2.0 percent in 2017.”
Visit the Economic & Strategic Research site at www.fanniemae.com to read the full August 2017 Economic Outlook, including the Economic Developments Commentary, Economic Forecast, Housing Forecast, and Multifamily Market Commentary. To receive e-mail updates with other housing market research from Fannie Mae’s Economic & Strategic Research Group, please click here.
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