By Jann Swanson | Mortgage News Daily
Housing remains the bright spot in a darkening economic outlook according to Freddie Mac’s economists. Though they have revised their forecast for economic growth downward in the latest edition of the company’s Outlook they are still forecasting housing will retain its momentum in 2016.
First quarter data painted “a bleak picture” of economic growth the report says. Information on consumer spending, manufacturing, auto and retail sales have led to successive downward revisions in real GDP growth estimates for the first quarter from others and Freddie Mac is revising its forecast from 1.8 percent to 1.1 percent. The company is looking for consumer spending, wage growth, and residential and business investment to pick up in the following quarters and for the GDP growth to be 2 percent for the entire year and 2.3 percent in 2017.
Even though job growth has been solid, Freddie Mac says wage growth has yet to materialize because of remaining slack in the labor market. However, labor participation did rise slightly in March as discouraged workers, seeing hope, again sought employment. The 0.6 percentage point increase since September 2015 means 1.5 million more workers. This more than offset the job gains over the same period so the unemployment rate ticked up 0.1 point to 5.0 percent in March.