Economy Watch: Fannie Mae More Optimistic
- Dec 21, 2010
December 21, 2010
By Dees Stribling, Contributing Editor
Fannie Mae’s Economics & Mortgage Market Analysis Group has upgraded its predictions for U.S. GDP growth in 2011 from 2.9 percent to 3.4 percent, another reflection of the prevailing optimism coming from prognosticators (for now). The GSE is even predicting an improving housing market for 2011.
“Despite rising mortgage rates, our forecast for home sales is stronger than the previous forecast, given our brighter economic growth and labor market outlook,” said Fannie Mae chief economist Doug Duncan in a statement. “We expect modest increases in home sales… due in part to modest additional declines in home prices, and we expect people to take advantage of affordability as their employment and income outlook brightens.”
That isn’t to say that Fannie Mae doesn’t believe there are any downside risks going forward. Jobs might not pick up, or some other country in Europe might blow up, economically speaking, the report noted.
Travel Spending Up in the Third Quarter
According to the Bureau of Economic Analysis, spending on travel and tourism in the United States increased at an annualized rate of 8 percent in the third quarter of 2010. Breaking that down, spending on passenger air transportation increased 29.8 percent in the third quarter as airlines decreased fares, thus spurring to higher demand. Spending on hotels also accelerated, increasing 9.5 percent as occupancy rates increased.
Overall growth in travel and tourism employment was 2 percent in the third quarter, with employment increasing 0.9 percent in air transportation services and 4.2 percent among hotels. The employment gain in hotels and other traveler accommodations is the largest increase since the second quarter of 2002, according to the BEA.
Also, travel on all roads and streets was up by 1.9 percent (4.9 billion vehicle miles) during October 2010 as compared with October 2009, according to the Federal Highway Administration. Not a vast increase, but it is a sign of economic activity — both the cause of it, and an effect — when people get in their vehicles and drive.
Federal Foreclosure Task Force Promises Findings in January
The Federal Housing Administration and Financial Fraud Enforcement Task Force — which is in charge of the federal-level investigation of robo-signing and other foreclosure unpleasantness — held a closed meeting on Monday with Treasury Secretary Timothy and HUD Secretary Shaun Donovan. Afterward, the secretaries said in a statement that the results of the investigation will be released in January.
Wall Street turned in another mixed day on Monday, with the Dow Jones Industrial Average losing 13.78 points, or 0.12 percent. The S&P 500 and the Nasdaq gained 0.25 percent each, however.