Economic Growth Outlook Remains Little Changed Despite First-Quarter Stall
April 15, 2016 | PRNewswireEstimated reading time: 1 minute
Economic growth stalled during the first quarter of 2016 but the full-year outlook remains little changed at 1.9 percent, according to Fannie Mae's Economic & Strategic Research (ESR) Group's April 2016 Economic and Housing Outlook. Consumer and business spending and net exports came in below expectations, and trade, inventory, and business investment likely weighed heavily on GDP in the first quarter. However, the ESR Group does not view weakness in the first quarter as the start of deteriorating economic activity and expects slightly better growth in the second quarter buoyed by a pick-up in consumer spending that should continue over the rest of the year.
"We expect a healthy labor market, the solid hiring trend seen during the last few months, and stronger household incomes to boost consumer spending over the rest of the year despite weak economic activity in the first quarter," said Fannie Mae Chief Economist Doug Duncan. "The fourth consecutive increase in the labor force participation rate amid solid job growth has slowed the decline in the unemployment rate, and, combined with anemic productivity growth, may help explain the failure of wages to accelerate more rapidly. With the uptrend in the labor force participation rate and subdued wage pressure, the Fed appears to feel less urgency for a second fed funds rate hike, particularly given that risks to global economic and financial developments are tilted to the downside. We now expect only one rate hike in 2016 in the second half of the year."
"Our forecasts for housing activity, mortgage rates, and mortgage originations are little changed in the April forecast. We expect total mortgage originations to decline about 9.0 percent in 2016 to $1.56 trillion, with a refinance share of 40 percent," said Duncan. "Sustained improvement in the labor market and personal incomes among young adults should draw more potential homebuyers into the housing market, but many will continue to face affordability challenges. Home price growth has been rising at a faster clip than incomes, and the increasing supply of single-family housing is skewed toward larger and less affordable homes. These factors continue to weigh on housing affordability, particularly for first-time homebuyers."
Suggested Items
Benchmark Reports Q1 2024 Results
05/03/2024 | PRNewswireRevenue decreased quarter over quarter and year over year primarily due to decreases in Medical, Advanced Computing and Next-Generation Communication sales, which were partially offset by an increase in Complex Industrials sales quarter-over-quarter and increases in Semi-Cap and A&D sales year-over-year.
Ansys Announces Q1 Financial Results
05/03/2024 | ANSYSANSYS, Inc. reported first quarter 2024 revenue of $466.6 million, a decrease of 8% in reported and constant currency, when compared to the first quarter of 2023.
Sanmina's Second Quarter Fiscal 2024 Financial Results
05/02/2024 | Sanmina Corp.Sanmina Corporation, a leading integrated manufacturing solutions company, today reported financial results for the fiscal second quarter ended March 30, 2024 and outlook for its fiscal third quarter ending June 29, 2024.
TTM Technologies Reports First Quarter 2024 Results
05/02/2024 | TTM TechnologiesTTM Technologies, Inc., a leading global manufacturer of technology solutions including mission systems, radio frequency components and RF microwave/microelectronic assemblies, quick-turn and technologically advanced printed circuit boards , reported results for the first quarter 2024, which ended on April 1, 2024.
Worldwide Silicon Wafer Shipments Dip 5% in Q1 2024
05/01/2024 | SEMIWorldwide silicon wafer shipments decreased 5.4% quarter-over-quarter to 2,834 million square inches in the first quarter of 2024, a 13.2% drop from the 3,265 million square inches recorded during the same quarter last year, the SEMI Silicon Manufacturers Group (SMG) reported in its quarterly analysis of the silicon wafer industry.