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» VISIT US ONLINE @ DSNEWS.COM 21 ECONOMISTS QUESTIONING FORECASTS e Trump administration has come up with initial economic projections that forecast a rosy future for the country, but a number of economists and observers are questioning what they've seen from the data. According to a story by the Wall Street Journal's Nick Timiraos, who spoke on background with several sources, the new administration put together projections that showed U.S. gross domestic product reaching between 3 percent and 3.5 percent annually. e Journal reported that administration officials have done away with any formal budgetary process in producing these forecasts and instead plugged in numbers consistent with their goals. "What's unusual about the administration's forecasts isn't just their relative optimism but also the process by which they were derived," Vox reported Timiraos writing. According to CNBC, President Trump has vowed to increase economic growth in the United States to that magic number over the next decade. "My great economists don't want me to say this, but I think we can do better than that," the news outlet reported Trump telling the Economic Club of New York in a speech last year. For comparison, the U.S. economy has averaged about 2 percent each year since around the time of the financial crisis. ough some are in favor of Trump's economic forecasts, critics from independent outlets and organizations were quick to note that the forecasts clash with more reliable and nonpartisan reports. ese included much-less-rosier forecasts published by the Congressional Budget Office and Federal Reserve, both of which project less than 2 percent in GDP growth over the same time in question. Writing for the New York Times, Paul Krugman, a professor of economics, voiced his opinion by stating the reports as "economic arrogance" in an op-ed published in February. "ere is, as far as we can tell, no serious analysis behind this optimism," Krugman wrote. e Journal reported that administration officials have since revised their internal forecasts. MORTGAGE DEFAULTS ARE HOLDING STEADY In late February, S&P Dow Jones Indices and Experian released data for the S&P/ Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults. From December 2016 to January 2017, the index level for first mortgages increased from 0.71 percent to only 0.72 percent. Second mortgages saw a similarly small increase from 0.41 percent to 0.48 percent. Likewise, mortgage delinquency has shown signs of stabilization. Delinquency rates dropped by 7.3 percent last year but remained unchanged in the last two quarters. Mortgage originations saw a significant increase in 2016 as well. Joe Mellman, VP and Mortgage Business Leader at TransUnion said, "Originations have continued to grow across all risk tiers, which suggests lenders may be warming up to originating mortgages to nonprime borrowers, even though that share of the market remains small at under 4 percent." Across the five metropolitan statistical areas (New York, Chicago, Dallas, Los Angeles, and Miami), Miami had the highest rate of defaults at 1.67 percent, up 14 basis points since December. Dallas (0.75 percent) and Los Angeles (0.80 percent) both reported eight basis point increases, and Chicago reported a five basis point increase to 1.03 percent. New York reported the smallest default rate increase of one point to 0.88 percent. David Blitzer, S&P Dow Jones Indices Committee Chairman and Managing Director, said that consumer sentiment has risen in the past couple of years. "Recent data point to consumer optimism: Retail sales rose 5.5 percent in January 2017 compared to a year earlier, consumer sentiment measures rose over the last two years, and employment and labor market conditions are favorable," he said. "Federal Reserve data on consumer credit and mortgage debt outstanding reveal that consumers are borrowing money." In addition to mortgage defaults, the S&P/ Experian Consumer Credit Default Indices also covered bank-card defaults. As of January, bank cards saw an increase in defaults, up to 3.21 percent, the highest level since July 2013. At the same time, results from the report show that mortgage delinquency has not shown significant change.

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