GDP Growth Called “Transitory” While Low Inflation Appears Permanent


Posted To: MND NewsWire

While calling the recent report on real gross domestic product (GDP) the strongest first quarter in four years, Fannie Mae’s Economic and Strategic Research (ESR) group agreed with Freddie Mac’s economist that the 3.2 percent reported growth is unsustainable. Report details showed deceleration in both household and business spending growth compared to the fourth quarter. Half of the headline growth was due to increases in net exports and business inventories they said, and the growth in upcoming quarters should be closer to the previous trend of 1.8 percent as fiscal policy impacts fade, with government spending no longer boosting growth in the second half of the year. Despite the first quarter results they expect growth for the year to be only one-tenth point higher than earlier projections…(read more)

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