WASHINGTON, Sept. 23, 2014 /PRNewswire/ -- A recent
rebound in business investment has bolstered expectations for solid
economic growth during the remainder of 2014, according to Fannie
Mae's (OTC Bulletin Board: FNMA) Economic & Strategic Research
(ESR) Group. The robust headline growth in the second quarter was
upgraded from 4.0 to 4.2 percent in the government's second
estimate, with contributions from nearly all major GDP components.
In addition, recent data through June showed upward revisions on
net, suggesting that second quarter growth likely will be revised
higher.
"In our September forecast, we see the economy continuing to
accelerate toward 3.0 percent growth in the second half of the
year, in line with our prior forecast," said Fannie Mae Chief
Economist Doug Duncan. "Business
spending and confidence are trending up, and we expect to see a
healthy increase in business capital investment in the third
quarter following the double-digit annualized gain in the second
quarter. Consumer spending fell unexpectedly in July, as more
Americans appeared to be building their savings amid weakened
income expectations, however a surge in auto sales suggests a
reversal in August. If the labor market continues to improve,
consumers will likely be more willing to take on additional credit
card debt, giving a boost to spending growth. Additionally, a
decline in crude oil prices again in August has lowered the cost of
gasoline, which we expect to add to disposable income and support
spending in the current quarter."
"Recent housing activity isn't quite as positive, having shown
only lukewarm growth since a promising start to the third quarter,
but our forecast is little changed from August," said Duncan.
"Purchase mortgage applications have trended down over the past
three months, despite the declining interest rate environment. We
believe this suggests a residual conservatism on the part of
consumers and supports our view that the pace of growth in the
housing sector will be subdued during the remainder of 2014, with
modest improvement in 2015."
For an audio synopsis of the September
2014 Economic Outlook, listen to the podcast on the Economic
& Strategic Research site at www.fanniemae.com. Visit the site
to read the full September 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