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A Fannie Mae Economic and Housing Outlook report this week shows that although economic growth slowed in late 2015, there are bright spots in 2016 – including a tightening labor market and increased consumer spending.

"Slowing economic growth, worsening global financial conditions, and weakening inflation expectations have led us to revise our forecast for fed funds rate hikes to two instead of three this year," said Fannie Mae Chief Economist Doug Duncan. "We believe that the tightening labor market will further boost wages and help increase consumer spending. Recent survey data reaffirm a relatively healthy jobs market with increased job openings, hires, and quits, as well as decreased layoffs and decent gains in average hourly earnings."

Duncan also said he expects housing affordability to be constrained as home prices outpace income growth.

NAFCU Chief Economist and Director of Research Curt Long noted that the 2016 housing market looks positive for credit unions and their members.

"In spite of the turbulence we have seen in financial markets, economic conditions are mostly positive," Long said. "NAFCU is forecasting modest improvement in the housing market for 2016, with credit unions continuing to attract a growing share of originations."

In other economic news, the Wells Fargo/Gallup Small Business Index, which measures small-business-owner confidence, is 67 – up from 54 in late 2015 and back to where it was a year ago.