Author: Samantha Guzman February 26, 2015
Economic growth is expected to climb to 2.9 percent this year, up from 2.4 percent in 2014, according to Fannie Mae’s February 2015 Monthly Economic Outlook released on Thursday. Fannie Mae predicts this economic growth will boost the sluggish housing market into recovery.
“Our forecast calls for an increase in economic growth to 2.9 percent for 2015, which is a slight downward adjustment from our prior forecast but solid improvement nonetheless,” Fannie Mae Chief Economist Doug Duncan said.
The strengthening employment sector, declining commodity prices, and rising income prices are some reasons 2015 is set for a pickup, according to Fannie Mae’s Economic & Strategic Research (ESR) Group.
“Although we are beginning this year at a more modest pace compared to the above-trend numbers seen at mid-year 2014, the country’s aggregate income has benefitted from the improving labor market, which, combined with low gasoline prices, should help drive higher auto sales and overall consumer spending throughout 2015,” Duncan said. “Our forecast calls for a number of factors, including strong hiring and income growth, stabilized housing affordability, and modestly easing lending standards, to translate into improving housing demand throughout the year.”
However, the strong U.S. dollar weighs on the trade deficit, which may slow some growth efforts. Despite possible shortfalls with the global economy and future limited interest rate hikes, Duncan feels positive the housing industry will begin to see gradual increases.
“We continue to anticipate that the Fed will begin to hike short-term interest rates later this year, although weak global economic growth and geopolitical headwinds will likely limit the rise in long-term interest rates,” he said. “We expect total home sales to increase by approximately 6.0 percent for 2015, with total single-family mortgage production climbing to approximately $1.2 trillion. Total single-family mortgage debt outstanding should be relatively flat this year before picking up gradually in 2016 and 2017.”
January was the second straight month in which the total number of private sector jobs added declined from the previous month. November saw private sector job gains totaling 274,000, a number which dropped to 253,000 in December and down to 213,000 for January. Still, January was the fifth consecutive month and the ninth in the last 10 in which private sector payroll increases totaled more than 200,000.
“January marks another month of solid job gains and is in line with the NER (National Employment Report)’s twelve-month average of over 200,000 jobs added per month,” said Carlos Rodriguez, President and CEO of ADP.
Employment gains for small businesses, those with one to 49 employees, was way down from December to January (115,000 down to 78,000). Large companies, those with 500 or more employees, also saw a decline in the number of payrolls added, from 61,000 down to 40,000. The only segment that saw a month-over-month increase was medium businesses, where the number of jobs added jumped from 78,000 in December up to 95,000 in January.
“Employment posted another solid gain in January, although the pace of growth is slower than in recent months,” said Mark Zandi, chief economist of Moody’s Analytics. “Businesses in the energy and supplying industries are already scaling back payrolls in reaction to the collapse in oil prices, while industries benefiting from the lower prices have been slower to increase their hiring. All indications are that the job market will continue to improve in 2015.”
The number of jobs added in both the goods-producing and service-providing sectors declined from December to January. For the goods-producing sector, 31,000 jobs were added in January, compared to 47,000 in December. For the service-providing sector, payrolls increased by 183,000 in January, compared to 207,000 in December. One area in which the number of jobs added rose sharply from December to January was trade/transportation/utilities, where payrolls increased by 54,000 in January compared to 40,000 in December.
AUTHOR: BRIAN HONEA
Prepare for Thunderstorms and Lightning
All thunderstorms are dangerous because they can produce strong winds, lightning, tornadoes, hail and flash flooding.
Protect yourself and business family by getting prepared today.
February 2-6 is Severe Weather Preparedness Week.
Final tip of the Week – Tornado Safety
Determine in advance where you will take shelter in case of tornado warning.
Make copies of important documents. This includes papers, contracts, tax documents, etc. Scan them into the computer and then store them offsite to prevent mold or damage to documents.
by Tory Barringer On January 28, 2015 @ 5:38 pm
The U.S. housing market grew slightly more stable from October to November, with 15 states now on solid ground, according to Freddie Mac.
The company’s monthly Multi-Indicator Market Index (MiMi) improved 0.35 percent month-over-month in November to a reading of 74.7, Freddie Mac reported Wednesday. The index tracks current gauges of purchase applications, payment-to-income ratios, on-time mortgages, and employment and measures them against their long-term stable ranges. A reading between 80 and 120 is considered to be a sign of a stable market.
November’s increase pushed the index to a positive three-month growth trend of 1.07 percent.
“Overall [the] MiMi has improved for the third consecutive month showing housing markets are getting back on track,” Freddie Mac’s deputy chief economist, Len Kiefer, said in a statement.
According to Kiefer, the market benefited from falling mortgage costs and modest economic improvements in the latest reading.
“Low mortgage rates help to keep affordability in-check across many markets,” Kiefer said. “Labor markets are strengthening, but generally have room for improvement.”
Kiefer added that the company is watching changes in oil-dependent markets, which have seen “some deterioration on a month-over-month basis” as energy prices fall.
As of November, 15 states as well as the District of Columbia fell into a stable MiMi range, with North Dakota (95.8); Washington, D.C. (94.3); Montana (91.4); Wyoming (91.2); and Hawaii (89.1) leading the pack.
In addition, 34 of the 50 states are now showing an improving three-month trend, Freddie Mac said.
At the local level, eight of the 50 metro areas tracked for the index have values in a stable range, with San Antonio (89.5), Austin (87.0), Houston (85.3), Los Angeles (84.1), and Salt Lake City (83.6) looking the healthiest.
Article printed from DSNews: http://dsnews.com
Phil Groundhog Punxsutawney Sees Shadow; Winter Continues for six (6) more weeks of wintry weather along Northeast (sorry ya’ll)
General Beauregard in Georgia, doesn’t see Shadow, time to start planning for Spring Break!
Severe Weather Preparedness Week begins today February 2-6. Take a few simple steps to protect your business or family when sever weather strikes.
February 2 Tip
Purchase a life-saving NOAA Weather radio and choose an out-of-state friend or colleague as “check-in” if you get separated.