WASHINGTON, June 20, 2016 /PRNewswire/ -- Fannie Mae's (OTC
Bulletin Board: FNMA) Economic & Strategic Research (ESR) Group's full-year economic growth forecast remains unchanged in
June from the prior forecast of 1.7 percent. Recent data emphasize the uneven nature of the current economic expansion. Consumer
spending and housing activity have picked up, but a slowing trend in hiring and business investment has increased downside risks
to the forecast. Headwinds facing businesses include declining profits, weakening productivity, and rising labor costs.
"The bearish May jobs report signaled a further loss of momentum in the labor market. Weak hiring and downward revisions to
the prior two months' payroll gains contributed to the Fed's decision not to raise interest rates in June," said Fannie Mae Chief
Economist Doug Duncan. "Our expectation, which we've held since April, remains one rate hike this
year, most likely in September."
"Housing activity is gaining strength heading into the summer, with pending home sales rising to a decade high. In addition,
new home sales surged to an expansion best, a positive for single-family homebuilding, especially since only a small share of new
homes for sale are completed and ready to occupy," said Duncan. "However, recent pullbacks in construction hiring, likely due to
a shortage of skilled workers, could weigh on the outlook for the sector. With little improvement in the current housing supply
picture so far, we expect only moderate housing expansion this year."
Visit the Economic
& Strategic Research site at www.fanniemae.com to
read the full June 2016 Economic Outlook, including the Economic Developments Commentary, Economic
Forecast, Housing Forecast, and Multifamily Market Commentary. To receive e-mail updates with other housing market research from
Fannie Mae's Economic & Strategic Research Group, please click here.
Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's Economic & Strategic Research (ESR) 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 ESR 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 ESR 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 enables people to buy, refinance, or rent homes.
Visit us at: http://www.fanniemae.com/progress
Follow us on Twitter: http://twitter.com/FannieMae
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/economic-growth-outlook-holds-steady-for-2016-300286796.html
SOURCE Fannie Mae