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Fannie Mae Sees GDP Growth Shift Away from Consumer Spending
Fannie Mae’s latest forecast still projects full-year 2021 real GDP growth of 7%, but now expects business inventory investment and government spending will account for an increasing share of near-term economic growth, as consumer spending shifts toward services and away from goods.
Modestly weaker-than-expected consumer and construction spending data and an updated federal spending timeline led Fannie Mae’s Economic and Strategic Research Group to update its forecast, reflecting a larger share of 2021 economic growth occurring in the year’s second half.
Second-quarter growth is now expected to clock in at 8.1%, down from last month’s projected 10.1%. Q3 and Q4 growth projections were revised upward by 0.7 and 1.2 percentage points, respectively, to 7.1% and 6.6%.
“While recent home price growth has been historically high, we’re forecasting further home price appreciation to moderate through the remainder of the year and into 2022,” said Mark Palim, Fannie Mae deputy chief economist.
- ◦Economy
