September 16, 2020
Despite continued downside risks, full-year 2020 real GDP is now forecast to contract by 2.6%, an improvement from the prior month’s forecast of a 3.1% contraction, Fannie Mae said Tuesday.
The GSE’s Economic and Strategic Research (SR) Group attributed the upgrade to continued strength in consumer spending, and data suggesting that such spending will likely support economic growth through the remainder of the year. In particular, the ESR Group substantially upgraded its full-year 2020 forecasts for both new and existing home sales.
“The most important factor in our expectations for U.S. economic performance remains the impact of COVID-19 on household, business and policymaker actions,” said Doug Duncan, Fannie Mae’s chief economist.
He continued, “Optimism regarding a potential vaccine and declining infection and mortality rates are all supportive of stronger growth; however, any delays or disappointment in the development and deployment of a vaccine could result in a reduced rate of growth.”
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