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Fannie: Economic growth expected to weather headwinds

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Fannie: Economic growth expected to weather headwinds

Fannie Mae economists see some moderately positive signs.

Economic growth for the third quarter of the year likely came in weaker than expected, largely because of a worsening net exports picture, but fourth-quarter growth is expected to withstand ongoing headwinds, according to Fannie Mae's Economic & Strategic Research Group.

We see positive trends for consumer spending and housing heading into the fourth quarter."

Slowing global growth and the appreciating dollar should continue to weigh on the U.S. trade deficit as we move through the remainder of 2015. In addition, the employment picture remains murky as the September jobs report came in well below expectations, showing the weakest average employment gain over a three-month period since February 2014.

However, because consumer spending should remain supportive and the negative impact from the strong dollar should dissipate, the ESR Group expects the economy to strengthen slightly to 2.4% in 2016 from a forecast of 2.2% for 2015.

"Despite recent headwinds, which likely will slow economic growth compared to the first half of 2015, we see positive trends for consumer spending and housing heading into the fourth quarter," said Fannie Mae Chief Economist Doug Duncan. "Strong home price gains should help drive an increase in household net worth again in the third quarter, and, combined with low gasoline prices and mortgage rates, should support strong consumer spending throughout the rest of the year."

 

 

 

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