Economic growth in the second half of 2016 is expected to outpace the rate seen in the first half of the year, according to the September Economic and Housing Outlook from Fannie Mae.
Fannie Mae reported Monday that economic growth is expected to rise 2.6% in the second half of 2016 versus the 1% growth rate set in the first half of this year. The full-year forecast meanwhile is estimated to remain steady at 1.8%.
"Consumers continue to carry the economy and the earnings slowdown in the August jobs report may be an aberration in the recently improving personal income growth trend," Fannie Mae chief economist Doug Duncan said in a news release.
"However, the declining trend in business productivity has negative implications for businesses' profit outlook, as low productivity tends to boost labor costs, which could act as a headwind for hiring and investment."
Duncan also noted that Fannie Mae predicts residential investment will decline for a second consecutive quarter. But one bright spot is new home sales.
"The share of new home sales that are under construction or not started has climbed to nearly 70%, improving the outlook for single-family homebuilding," he said. "Existing home sales underperformed 2015 for the first time in July, however year-to-date sales are still 2.6% higher than during the same period last year."
