Second-quarter economic growth was weaker than expected and its composition presents a less optimistic outlook for the rest of the year, according to Fannie Mae’s Economic and Strategy Research Group. However, GDP growth is still expected to come in at 2.1% in 2015 and rise to 2.4% in 2016.

The federal government’s upward revision to first-quarter growth was essentially offset in the second quarter, due in large part to a drop in nonresidential investment in equipment and structures. These factors, coupled with continued headwinds from a strong dollar and renewed declines in crude oil prices, are expected to continue to pose challenges in the current quarter, although consumer and government spending will likely provide support. Housing also is expected to contribute to 2015’s growth, with year-to-date main housing indicators staying well above year-ago levels.

“While consumer spending growth picked up as we expected in the second quarter of this year, other components disappointed,” said Fannie Mae Chief Economist Doug Duncan. “However, incoming data suggest some upward revisions may be in the cards for the second quarter. Furthermore, job creation remains steady, with full-time employment getting closer to pre-recession numbers, and household net worth continues its gradual rise. On balance, our full-year growth outlook remains unchanged from the prior forecast at 2.1%.”