The economy is poised for a pickup in growth in 2015 amid a strengthening employment sector, rising income growth, and declining commodity prices, according to Fannie Mae’s Economic & Strategic Research (ESR) Group. The labor market has started the year on an upbeat note and is expected to lift consumer confidence, in turn helping to boost consumer spending, manufacturing activity and the pace of the housing recovery. Economic growth may face some headwinds as a strong U.S. dollar weighs on the trade deficit. However, the economy is expected to climb to 2.9 percent for the full year, up from 2.5 percent growth in 2014.
"We expect housing to shift up a gear in 2015 following the uneven and ultimately disappointing activity last year," says Fannie Mae Chief Economist Doug Duncan. "Our forecast calls for a number of factors, including strong hiring and income growth, stabilized housing affordability, and modestly easing lending standards, to translate into improving housing demand throughout the year. We continue to anticipate that the Fed will begin to hike short-term interest rates later this year, although weak global economic growth and geopolitical headwinds will likely limit the rise in long-term interest rates.”
Source: Fannie Mae
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