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Press Release

2014 Economic Growth Off to a Chilly Start

February 26, 2014

Cold Weather Snap, Other Crosswinds Stifle January Activity

Pete Bakel


Full-Year Forecast for Modest Growth Unchanged

WASHINGTON, DC – Economic activity should slow in the first quarter of the year and faces some downside risks due in part to the recent cold weather in major parts of the U.S., but a modest pickup in growth remains in the forecast for all of 2014, according to Fannie Mae’s (FNMA/OTC) Economic & Strategic Research Group. Following a surge in activity during the second half of 2013, the group expects weaker first quarter growth due to various factors, including a substantial correction to the unsustainable buildup of inventories reported during the second half of last year, which exceeded sales levels. In addition, the cold snap may contribute to a dip in construction activity and consumer shopping in the first quarter. However, amid strengthening private sector activity throughout the year, growth is expected to increase from 2.7 percent in 2013 to 2.9 percent in 2014.

“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,” said Fannie Mae Chief Economist Doug Duncan. “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 of 2.9 percent real growth in 2014.” 

For an audio synopsis of the February 2014 Economic Outlook, listen to the podcast on the Economic & Strategic Research site at Visit the site to read the full February 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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