Tag Archives: GDP

Fannie Mae's Economic & Strategic Research Group is maintaining its outlook for slow and steady growth in 2013.

Capital Economics forecasts the S&P 500 equity price index will end 2013 close to the current level of 1,500 and expects home prices to rise in the neighborhood of 5 percent. In turn, the growth in household wealth, the firms says, could lift GDP by around 0.7 percent. The most recent Flow of Funds report for Q3 2012 showed net household wealth grew to about $64.7 trillion. Capital Economics says the Q4 report, due March 7, is likely to show an increase of household wealth to around $65.1 trillion.

So, there├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós some sort of football game this weekend. Like many economists, I├â┬ó├óÔÇÜ┬¼├óÔÇ×┬óm a bigger baseball fan than football, intrigued by the statistics in baseball, statistically a zero-sum game unlike most other sports. Just about every positive statistic in baseball for one player has a corresponding negative statistic for another. All that aside, there is some linkage between Super Bowl (yes, that's the name of this Sunday's game) and the economy, not just the stock market as many "analysts" like to write.

Fixed mortgage rates took a major leap up last week amid news of a growing economy led in part by the recovering housing market.

With a nod to the report the nation's economy had contracted in the fourth quarter, the Federal Open Market Committee ("FOMC") voted Wednesday to continue its program of purchasing $40 million a month of mortgage-backed securities (MBS) and to maintain the target Fed Funds rate at 0 to 0.25 percent. The FOMC vote was 11-1 with only Kansas City Fed President Esther George (in her first meeting as a voting member of the committee) voting "no."

For the first time since the end of the Great Recession, real gross domestic product (GDP) fell in the fourth quarter of 2012, the Bureau of Economic Analysis (BEA) reported. According to the BEA, GDP fell 0.1 percent in Q4, performing even worse than economists had expected. The biggest hits to fourth quarter GDP came from a sharp drop in government spending, which fell 6.6 percent from the third quarter. Private investment fell 0.6 percent, primarily due to inventory investments and a fall-off in exports.

While some analysts have been speculating over when the economy will return to its "normal" state, Fannie Mae says slow growth is the "new normal."

A strengthening private sector should give the economy a boost in the second half of 2013 after a slow start, according to Bloomberg BNA's annual Economic Outlook. The forecast--a consensus projection from economists at 21 leading financial, consulting, and academic organizations across the country--calls for a temporary slowdown in economic growth in the first half of the year as the country feels the impacts of the payroll tax hike and other major shifts in federal fiscal policy.

Washington may have (arguably) successfully avoided 2013's budgetary landmines so far, but the Mortgage Bankers Association (MBA) reports everything it has seen so far suggests economic growth will be modest in 2013. In its most recent Economic and Mortgage Finance Commentary, the association forecasts slow economic gains in the first half of 2013 "as the effects of the payroll tax increase and the spending cuts from sequestration or a similar decline in government spending kicks in."

What does the commercial real estate sector have to look forward to in the coming year? Not much, if the fiscal cliff isn't averted, according to a study from commercial real estate (CRE) services provider Cassidy Turley. While dropping over the fiscal cliff would likely cause some serious problems for CRE, the firm also predicts a successful resolution of the problem could build on 2012's gains in GDP and employment, propelling the economy (and the office market) further forward.