It wasn’t a good year for Freddie Mac and one could rightfully challenge its accounting methods based on the problems it has encountered in the last year but the Office of the Chief Economist at Freddie Mac released its 2009 Economic and Housing Market Outlook recently and their forecasts deserve a look.
While the outlook calls for the U.S. to officially pull out of the recession in the third quarter of 2009, it also predicts unemployment to continue to rise peaking at 8.7% in the fourth quarter and remaining above current levels through 2010.
It is hard to see where they expect the growth to come from as they predict housing values to continue to drop significantly and housing starts and home sales to stay at depressed levels.
They predict the S&P Case-Shiller Home Price Index will drop another 20% in the first quarter and the index to drop 12.8% for the year and to decline another 3% in 2010.
The report predicts the economy will decline with Gross Domestic Product (GDP) dropping a whopping 6% in the fourth quarter of 2008, then dropping 4% in the first quarter and 2% in the second quarter before showing 2% growth in the third quarter.
All bad news from a quasi private company/Government Sponsored Enterprise (GSE) that contributed to the current economic mess we find ourselves in.
Tags: Economic outlook, Freddie Mac, GDP, GSE
