Fannie Mae: Growth Outlook Strong Despite Fiscal Woes

Last month's uptick in ""consumer confidence"":https://themreport.com/articles/consumer-confidence-rebounds-in-february-2013-02-26 suggests consumers may not be too concerned about pending impacts of fiscal policy, but ""Fannie Mae"":http://www.fanniemae.com/portal/index.html predicts they will nonetheless feel some financial tightening over the next few months.

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Several economic indicators are trending positive right now, but the GSE's March economic forecast warns the pending sequestration and the effects of higher social security taxes may dampen some of the current progress.

On the other hand, the GSE continues to see housing as a bright spot in the economy--one that is not likely to darken in the near future.

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Jobs, consumer confidence, and the stock market have all been on the rise, and the manufacturing and service industries are experience growth ""at a healthy pace,"" according to Fannie Mae.

All of this has led the GSE to believe ""the first quarter will be stronger than we originally thought"" and furthermore led the enterprise to abandon any prediction of a recession ""anytime soon.""

Recent job growth may be impacted by the government sequester as some employees are laid off or incur furloughs, and incomes and consumer spending, both of which dipped at the start of the year, may remain slow in the next few months.

However, Fannie Mae predicts economic growth to expand in the second half of this year, reaching 2.1 percent for the year overall.

""[W]e see some improvement in our outlook for growth this year, primarily because of continued strength in the housing market,"" Fannie Mae said.

The sector continues to improve with rising prices ""helping to boost household net worth and providing support to consumers amid ongoing fiscal tightening,"" according to the GSE.