WASHINGTON, May 21, 2014 /PRNewswire/ -- After stalling
out in the first quarter of the year, recent indicators suggest the
economy is poised for a pick-up in growth in the second quarter of
2014, according to Fannie Mae's (OTC Bulletin Board: FNMA) Economic
& Strategic Research Group. March data revealed positive
consumer spending in both goods and services, helping set up a
trajectory for more solid spending growth in the current quarter.
April auto sales marked the second consecutive month of at least 16
million annualized units – the first time since 2007. The outlook
for business capital spending also has improved, with core capital
goods orders jumping 3.5 percent in March to the highest nominal
reading on record. Additionally, the upbeat April jobs report
showed a pickup in hiring at the fastest pace in more than two
years, further signaling that the economy is gathering speed.
"We have downgraded our May forecast slightly from April
following a very weak first quarter, but we anticipate economic
growth to gain momentum in the second quarter and remain firm
throughout the rest of this year," said Fannie Mae Chief Economist
Doug Duncan. "Reduced drag both from
government spending and fiscal policy uncertainty as well as
improving financial and labor market conditions should contribute
to a rebound, but the sizable down draft from the first quarter
likely will keep full-year growth subdued. Overall, we expect
economic growth to accelerate to just over 3.0 percent on an
annualized basis in the current quarter, and to come in at 2.4
percent for all of 2014."
"The housing picture remains more worrisome, with existing home
sales, new home sales, housing starts, and multifamily housing all
experiencing year-over-year declines despite improving consumer
attitudes," said Duncan. "However, we anticipate a modest uptick in
housing activity as the spring and summer selling and building
seasons get under way. We believe this year will likely be a bump
in the long-term road back toward normal levels, which we continue
to expect sometime in late 2016."
For an audio synopsis of the May
2014 Economic Outlook, listen to the podcast on the Economic
& Strategic Research site at www.fanniemae.com. Visit the site
to read the full May 2014 Economic
Outlook, including the Economic Developments Commentary, Economic
Forecast, Housing Forecast, and Multifamily Market Commentary.
Opinions, analyses, estimates, forecasts, and other views of
Fannie Mae's Economic & Strategic Research (ESR) Group included
in these materials should not be construed as indicating Fannie
Mae's business prospects or expected results, are based on a number
of assumptions, and are subject to change without notice. How this
information affects Fannie Mae will depend on many factors.
Although the ESR Group bases its opinions, analyses, estimates,
forecasts, and other views on information it considers reliable, it
does not guarantee that the information provided in these materials
is accurate, current, or suitable for any particular purpose.
Changes in the assumptions or the information underlying these
views could produce materially different results. The analyses,
opinions, estimates, forecasts, and other views published by the
ESR Group represent the views of that group as of the date
indicated and do not necessarily represent the views of Fannie Mae
or its management.
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SOURCE Fannie Mae