Fannie Mae puts 2011 economic growth at 2.5%
Fannie Mae continues to expect sluggish job creation and modest consumer spending to dictate economic growth through this year and next. In its October economic outlook, the government-sponsored entity's economics and mortgage market analysis group said the economic outlook remains clouded. The GSE sees growth of less than 2% as 2010 closes, with modest gains in the first half of next year and a "strengthening" in the second half of next year. Fannie Mae continues to forecast 2.2% growth for all of 2010 with 2.5% growth for 2011. Those are the same estimates the GSE provided last month, when it said a "housing bottom proves elusive. "The labor market has yet to make significant progress, which is the primary reason for our continued weak growth forecast," Fannie Mae chief economist Doug Duncan said. "With economic growth slowing, job creation also has been tepid, keeping the unemployment rate high. Housing sales will likely be soft until the labor market strengthens. Write to Jason Philyaw.