In this Issue

• The U.S. economy remains resilient with strong Q3 growth even as the labor market moderates.
• Recent volatility in mortgage rates has weighed on housing and mortgage activity.
• The housing market continues to be plagued by a shortage of housing units for rent and for sale. We estimate the national housing shortage is 3.7 million units as of Q3 2024. MORE

Recent developments

U.S. economy: The U.S. economy continues to grow at a robust pace, as evidenced by the advance estimate of Q3 2024 seasonally adjusted annual rate of growth of Real Gross Domestic Product (GDP).1 Growth for Q3 was 2.8%, a slight decrease from the rate of 3.0% in the second quarter, but well above the long-run potential growth of 1.8% estimated by the Congressional Budget Office (CBO). As with the previous quarters, in Q3 2024, consumption spending led the growth and at 3.7%, grew at the fastest pace since Q1 2023. Consumption spending has remained resilient even in the face of high inflation and a still-high interest rate environment. The contribution of this component to overall growth was around 2.5 percentage points. Compared to Q2 2024, the decrease in Q3 GDP growth was primarily due to a downturn in private inventory investment and a significant deceleration in residential fixed investment. This was partially offset by increases in exports, consumer spending, and federal government spending.

To continue reading https://www.freddiemac.com/research/forecast/20241126-us-economy-remains-resilient-with-strong-q3-growth#spotlight