Fannie Mae finds economy slowing
Monday, April 23, 2012
A recent report from Fannie Mae reveals that the economy could be shifting back to a lower gear even with consumer spending showing signs of an uptick.
Despite economic growth reaching 3 percent at an annualized rate for the fourth quarter last year, new data indicates that economic growth actually slowed during the first quarter of this year, which is one par with previous projections, according to Fannie Mae's Economic and Strategic Research Group.
"Consumer spending continued its upward trajectory with strong spending on autos and other durable goods, and spending on services showing the largest gain in nearly two years," said Fannie Mae Chief Economist Doug Duncan. "However, the pickup in consumer spending has outpaced income growth, which means that consumers are increasing their spending by borrowing from their savings. Real disposable income has been flat and that needs to change for a higher pace of economic activity to occur."
A recent report from Bankrate revealed consumer financial security reached its highest level in more than a year and a half. However, there is still a general fear among investors and consumers regarding stocks and the jobless rate.
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