Economy on Slow, Steady, Path to Recovery

In the February Economic Outlook fromrnFreddie Mac’s Office of the Chief Economist is projecting a slow, steady pathrnto recovery as the economy, it says, continues to build on the momentum itrndisplayed at the end of last year.  Thernreport cites 243,000 new jobs in January, an unemployment rate falling to 8.3rnpercent and an increase in job openings to 3.4 million in December asrnindications of improvement.  At the samerntime, there was a relatively low level of 2 million “voluntary separations,”rni.e. people quitting their jobs, that reflects a nervousness about the job marketrnand a 1.2 percent drop in inflation-adjusted hourly wages, the steepest annualrnfall since 1989, also signaling job market weakness. </p

The housing sector portion of the FreddiernMac report was a summary of information for the month already reported herernfrom sources such as the National Association of Realtors®,rnS&P/Case-Shiller, Mortgage Bankers Association, and others.  Most of the housing data shows improvingrnsales, declining inventories, and continued softening of home prices.  Freddie Mac said it expects “more warmth” inrnthe housing market sometime in 2013 “as the economy continues on its slow pathrnto a stronger recovery in a low interest-rate environment.”</p

The office is projecting that, by thernend of 2013 housing starts will be at an annual level of 1 million (compared torn1.36 million in 2007, the last year before the market collapsed) and sales ofrn5.05 million (compared to 5.19 million.)   rnPrices are expected to gain some footing this year and begin to increasernin the first quarter of 2013.

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