Weak Growth Continues as US Housing Slows

Fannie Mae
August 22, 2022
Category: Finance & Economics
Region: United States

We project 2022 real gross domestic product to be flat at 0.0 percent growth on a Q4/Q4 basis. The latest GDP reading showed an expected decline in Q2, but recent data point to a return to modest growth in Q3. We continue to view the economy as generally stagnating in light of tighter monetary policy and high inflation. Indicators are painting a mixed picture, most prominently the negative GDP readings in the first half of the year despite strong employment growth over the same period. As the full effects of tighter monetary policy and fading fiscal stimulus work through the economy and suppress consumer spending, we expect a moderate contraction to occur in 2023. Our forecast for 2023 GDP on a Q4/Q4 basis is negative 0.4 percent, unchanged from our prior forecast. …We lowered our 2022 forecast for total home sales slightly to 5.78 million units.

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