Economy Struggling to Regain Momentum According to Fannie Mae’s Economics & Mortgage Market Analysis GroupBy Fannie Mae, PRNE
Thursday, July 21, 2011
WASHINGTON, July 22, 2011 -
- Housing Continues on a Slow
Track as Uncertainty Abounds
The economy is struggling to regain the momentum lost since the
beginning of 2011 as higher gasoline prices and supply-chain
disruptions due to the Japan tragedy during the first half of the
year combined to restrain growth, according to the July 2011
Economic Outlook released today by Fannie Mae’s (OTC Bulletin
Board: FNMA) Economics & Mortgage Market Analysis Group.
Economic growth in the second quarter is estimated to have moved at
the same anemic 1.9 percent pace seen during the first quarter.
However, motor vehicle production is on track for a rebound and
we’ve seen a decline in oil prices, which should encourage growth
of about 3 percent for the current quarter before slowing modestly
in the final quarter. Full-year growth is projected to slow to 2.4
percent, down from 2.8 percent in 2010.
The economy’s inability to gain traction stems from continued
uncertainty. The ongoing European and U.S. sovereign debt issues
may have a significant downside impact on the banking system and
broader financial markets, both here in the U.S. and abroad.
Housing, a central piece of the economic story, continues to add
nothing to economic growth, with home sales expected to rise only
slightly over last year’s numbers. And, two consecutive very poor
employment reports have compounded issues for an already stressed
“Clearly, the renewed slowdown in hiring underscores the
uncertainty surrounding the economic outlook,” said Fannie Mae
Chief Economist Doug Duncan. “The lack of sustained, robust job
growth continues to push out into the future the time for the
housing market to heal, which is crucial to a meaningful economic
For an audio synopsis of the July 2011 Economic Outlook, listen
to the podcast on the href="www.fanniemae.com/media/economics/index.jhtml?p=Media&s=Economics+%26+Mortgage+Market+Analysis">
Economics & Mortgage Market Analysis site at href="www.fanniemae.com/">www.fanniemae.com.
Visit the site to read the full July 2011 Economic Outlook,
including the Economic Developments Commentary, Economic Forecast,
and Housing Forecast.
Also available via link from the Economic Developments
Commentary is the Multifamily Market Commentary by Kim Betancourt,
Director, Multifamily Economics and Market Research. The Commentary
provides data on second-quarter 2011 preliminary multifamily
Opinions, analyses, estimates,
forecasts, and other views of Fannie Mae’s Economics & Mortgage
Market Analysis (EMMA) 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 EMMA 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 EMMA 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 exists to expand
affordable housing and bring global capital to local communities in
order to serve the U.S. housing market. Fannie Mae has a federal
charter and operates in America’s secondary mortgage market to
enhance the liquidity of the mortgage market by providing funds to
mortgage bankers and other lenders so that they may lend to home
buyers. Our job is to help those who house America.
Pete Bakel, Fannie Mae, +1-202-752-2034
Tags: District of Columbia, Fannie Mae, July 22, Washington