Although harsh winter weather may have impacted the U.S. economy – slowing home sales, consumer retail spending and new construction – in January, government-sponsored enterprise (GSE) Fannie Mae is sticking by its previous economic forecast of 2.9% real growth in 2014.
In its February 2014 Economic and Housing Outlook, the GSE says that while unusual winter weather might end up hindering growth in the first quarter, ‘a modest pickup in growth remains in the forecast for all of 2014.’
Other factors impacting first-quarter growth will include "a substantial correction to the unsustainable buildup of inventories reported during the second half of last year, which exceeded sales levels," the GSE says in its forecast.
‘Our February forecast continues our theme for the year, "Private Forces Move to the Fore,' despite the fact that first-quarter growth is likely to be slower than the last two quarters of 2013,’ says Doug Duncan, chief economist for Fannie Mae, in a statement. ‘Some may attribute the slower pace of growth to the cold weather, which was combined with slower employment growth going into 2014 and other cross currents that have appeared in global economic and financial market conditions. However, we expect the impact from special factors currently weighing on activity to reverse and believe we will see sufficient pickup later in the year to meet our forecast expectation.’