Fannie Mae Upgrades US Economic Growth Outlook for 2020: Trade Deal Optimism?
The US economy is expected to grow at a faster pace than previously forecast, according to Fannie Mae’s latest estimates. On Monday, Fannie Mae revised its growth outlook for the US economy, stating that it now sees the US economy grow at 1.9% in 2020, higher than its previous estimate of 1.7%. Meanwhile, CPI is expected to rise to 1.9% in 2020.
US economic growth is expected to strengthen into next year, supported by strong growth in consumer spending and in the housing market in the event of the US and China signing their interim trade agreement soon. Fannie Mae anticipates that this trade deal could be signed as soon as early December, ahead of the December 15 deadline for the next tariff hike to come into effect.
It has, however, revised its economic growth forecasts for Q4 and the whole of 2019 lower on account of the ongoing trade war. Q4’s growth is now seen at 1.6% vs. 2.1% previous, while overall 2019 GDP is now estimated at 2.1% vs. 2.2% previous. On the positive side, Fannie Mae anticipates unemployment to remain low while jobs to grow at a strong pace, which could keep consumer spending supported through next year, while housing is also expected to pick up in 2020, lending a further boost to the US economy.
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