FNMA outlook

Economic Growth Outlook Less Upbeat for the Second Half of the Year

Katie Penote   August 24, 2015

WASHINGTON, DC – The first print of second quarter economic growth was weaker than expected, and its composition presents a less optimistic outlook for the rest of the year, according to Fannie Mae’s (FNMA/OTC) Economic & Strategic Research (ESR) Group. The federal government’s upward revision to first quarter growth was essentially offset in the second quarter, due in large part to a drop in nonresidential investment in equipment and structures. These factors, coupled with continued headwinds from a strong dollar and renewed declines in crude oil prices, are expected to continue to pose challenges in the current quarter, although consumer and government spending will likely provide support. Housing also is expected to contribute to 2015’s growth, with year-to-date main housing indicators staying well above year-ago levels.
“While consumer spending growth picked up as we expected in the second quarter of this year, other components disappointed,” said Fannie Mae Chief Economist Doug Duncan. “However, incoming data suggest some upward revisions may be in the cards for the second quarter. Furthermore, job creation remains steady, with full-time employment getting closer to pre-recession numbers, and household net worth continues its gradual rise. On balance, our full-year growth outlook remains unchanged from the prior forecast at 2.1 percent."
“We hold by our previous comments that income growth still needs to strengthen, particularly for younger households, in order to drive significant housing growth, but we are nonetheless seeing some positive improvements in the housing sector,” said Duncan. “Home sales have trended up and inventories are lean, supporting strong home price appreciation. That price growth, driven by laggard supply response, helps build equity for existing owners but is a headwind for first-time buyers. Given significant uncertainties from Greece and China, continued global monetary easing, and an expected slow pace of monetary tightening by the Fed, we anticipate mortgage rates to rise only gradually through next year, which should continue to help support mortgage demand.”

Visit the Economic & Strategic Research site at www.fanniemae.com to read the full August 2015 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.

its all about the math....

the parallels between the functioning of the federal government and the public education system are becoming more and more apparent - both are dysfunctional and focused on bureaucracy growing....

Oh, I forgot...the Department of Education is a federal bureaucracy!  

Improving Education Could Pay Off In Economic Growth

August 18, 2015

Developing students who think critically about math could have national economic implications. 

Mathematics not only teaches students how to perform basic math functions, but also it also cultivates problem-solving, refines cognitive ability and develops reasoning skills. (which are important in the 'real world' that we live in....my comment)

A nation's future economic growth can be predicted by student performance at age 15 on an internationally standardized mathematics test, highlighting the need for quality mathematics instruction in U.S. schools. 

• Statistical analysis of student mathematic abilities are indicative of national economic growth.
• Performing 25 points higher than average on the international test correlated to an additional national output of more than $40 trillion in the next 20 years.
• The quality of education is imperative, not the number of years of schooling a student completes.

Inspiring a generation to become competent mathematicians will require a high caliber of teacher that cares more about the student′s quality of learning than yearly test scores.  Instead of focusing on student performance or early childhood education, policymakers would do well to shift attention to recruiting and retaining excellent teachers.  

Increasing requirements for teacher certification, offering enticing wages and competitive benefits, and allocating substantial time for professional development and lesson planning would all serve to provide students with a higher caliber of teachers necessary to improve the national mathematics competency. (not more administrators!!! my comment)

The incentive to improve U.S. mathematics education is clear. If poorly performing student scores could be raised to even 100 points below the international average, the additional output over the next 20 years would equal $72 trillion, roughly four times the annual U.S. GDP. The urgency to develop quality mathematics programs taught by high caliber teachers is necessary.

Source:  Robert Litan, "How Improving Education Could Pay Off In Economic Growth," Wall Street Journal. August 8, 2015.

10 year treasury yield....

With all of the economic indicators reflecting continuing volatile conditions it would appear that the 10 yield movement shall follow suit.