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Fannie's Forecast Sees a Brightening Recovery
Monday, September 21, 2020
Fannie Mae has upgraded its forecast for the third
quarter gross domestic product (GDP). It now expects growth at an annualized pace
of 30.4 percent, up from the 27.2 percent the company's economists predicted in
August. They say that growth has clearly slowed from the days soon after the business
shutdowns and orders to shelter in place were gradually lifted by states and cities
in May and June, but more recent data points to a continued recovery. It was originally thought that personal consumption
expenditures would fall off significantly as expanded unemployment benefits expired,
but they rose 1.6 percent in July, and early data for August suggest that
growth continued. Auto sales, one component of the PCE, rose 4.5 percent and credit
and debit card transactions appear to have increased as well. There are also
indications that business and housing investment will grow at a faster pace in
the third quarter than previously thought.
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