The U.S. economy was stronger than expected, according to Fannie Mae's analysis of this year's second quarter.
The government-sponsored enterprise's economic and strategic research group found growth of 2.8% exceeded expectations by nearly half a percentage point. Fannie's economists credited improved consumer spending, as well as higher residential and nonresidential investment, with spurring much of the quarter's strong growth.
As a result of higher than expected growth Fannie revised upwards its annual forecast for 2015, though its second half economic forecast remains unchanged. Fannie believes global economic uncertainty will be too strong of a headwind for the economy to keep up the overachieving pace it set during this year's second quarter.
"We believe consumer spending will be the largest contributor to growth for the remainder of the year, particularly as consumers' confidence, household net worth, and income growth prospects have continued to strengthen amid an improving jobs market," said Fannie chief economist Doug Duncan in a statement. "On the downside, the drop in oil prices will likely continue to weigh on nonresidential investment in structures, and on balance we expect net exports to be a drag on growth this year, due in large part to the debt crisis in Greece and deteriorating economic conditions in China."
That second half forecast includes continued improvement for the housing sector this summer, Duncan said. ""We expect to see strong sales, lean inventories, and rising confidence through the rest of the year, which should support increased home building activity and give an added boost to economic growth."
