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American Jobs Act Could Yield 1.3M New Openings

Mortgage giant ""Freddie Mac"":http://www.freddiemac.com/ released an outlook Tuesday on the state of the housing sector and economy at-large, alongside projections that still-anemic demand will likely prevent any new activity in new-home sales, home prices, and housing health. One conclusion held out hope for ""President Barack Obama's"":http://www.whitehouse.gov/administration/president-obama American Jobs Act, which the GSE said could add as much as 1.3 million jobs to the economy.

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""Writing"":http://www.freddiemac.com/news/finance/docs/Sep_2011_public_outlook.pdf for the GSE, Frank Nothaft, VP and chief economist for the company, offered up hopeful projections for more fiscal stimulus measures, including ones likely to take place in lieu of tax cuts and program funds available under the Jobs Act if Congress passes it.

He called the possible stimulus an example of ""one possible fiscal policy response"" that would couple $245 billion in tried-and-tested tax cuts with $202 billion in federal assistance aimed at encouraging consumers to spend and businesses to invest.

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He also outlined an ongoing scenario in which the ""Federal Reserve"":http://www.federalreserve.gov/ continues shoring up liquidity in the national and global markets, with few material signs of progress set to emerge.

""Monetary policy actions have already had a significant effect on interest rates in an effort to support economic growth,"" Nothaft wrote.

""With monetary policy expected to keep interest rates low for a while, affordability will remain high for potential homebuyers. In the meantime, many will choose to rent,"" he added.

He delineated the Fed's role as one that will continue to oversee short-term Treasury buy-ups, lesser yield spreads, and the promotion of a housing finance sector at all-time highs of affordability.

The outlook arrived amid a week in which new-home sales, sagging prices, and a wave of uncertainty from the euro zone markets presented more trouble ahead for the housing economy.

Whither macroeconomic forces, according to Nothaft?

""Financial worries among consumers are likely holding back home sales, which remain lackluster despite the most affordable home-buying market in decades,"" he said.

""Boosting job and income growth among households will support consumer confidence and also stimulate household formation,"" Nothaft concluded.

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.
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