The Gross Domestic Product is expected to see a downturn by the end of the year, signaling the likelihood of a recession in early 2023, according to a Fannie Mae report.
The Fannie Mae Economic and Strategic Research Group says it is anticipating a decline in both corporate and residential investment heading into the new year, as well as less robust consumer spending.
At the same time, the group predicts that although the sale of single-family homes will decline next year, they are expected to increase in 2024 by more than 18%.
In fact, the group appears positively bullish on the subject of 2024, predicting an overall GDP growth rate of 2% for the entire year.
In a statement, Doug Duncan, senior vice president with Fannie Mae, remarked: “The economy continues to slide toward a mild recession, which we think will begin in the new year, without housing construction leading the slowdown.”
But Duncan added that “higher interest rates have triggered the typical decline in residential fixed asset investment that has historically led to either economic slowdowns or recessions.”
For all of that, the Fannie Mae economist said he believes ultimately the nation’s housing sector is well positioned enough to “help pull the economy out of what we expect to be a short recession.”
The group additionally notes that the “one major area pointing to continued economic strength is the labor market,” adding that some 261,000 jobs were added in October, contributing to a total of more than 4 million new jobs for the year.
The Economic and Strategic Research Group is tasked with studying current national economic data, as well as analyzing both historic and emerging trends.
By Garry Boulard
