Q4 GDP Commentary from MBA's Mike Fratantoni

The following is MBA SVP and Chief Economist Mike Fratantoni’s reaction to this morning’s U.S. Commerce Department report on Q4 GDP:

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“Economic growth remained strong in the fourth quarter, bolstered by solid consumer spending on both goods and services. The pace of growth slowed from the third quarter, but at 3.3%, it remained well above the sustainable long-run trend growth rate of about 2%.

“This pace of growth is consistent with the persistent strength in the job market. The unemployment rate remains quite low, and job growth has repeatedly come in faster than expected. 

“Stronger economic growth will benefit the housing market, keeping demand robust. Moreover, today’s report also showed further reductions in inflation, which will enable the Federal Reserve to cut rates later this year – as they have been hinting.

“For the broader economy, 2023 was a much better year than we had expected, even as the housing and mortgage markets were stuck in the doldrums.  While we still anticipate that the economy will slow in 2024, this strong momentum in the fourth quarter makes a precipitous decline less likely.  A path for lower rates should help housing markets.”