2013: Transition to "Normal"?
Continued Modest Economic Growth Forecasted for Near- and Mid-Term
Housing Sector Poised to Contribute More to Overall Growth
WASHINGTON, Jan. 24, 2013
WASHINGTON, Jan. 24, 2013 /PRNewswire/ --The trend of gradual but
below-potential economic growth seen in 2012 is expected to carry over through
2013 and into 2014. This modest growth path combined with the real GDP growth
rate during the recovery from 2009 to this point of 2.2 percent annualized
give credence to claims that the recovery's slow pace has become the "new
normal," according to Fannie Mae's (OTC Bulletin Board: FNMA) Economic &
Strategic Research Group. The fiscal cliff and ongoing debt ceiling debate,
which are likely to suppress consumer spending in the first half of 2013,
continue to present potentially strong headwinds to meaningful growth
activity. Overall, a 2 percent growth rate is forecasted for 2013, similar to
the subdued pace of 2012.
This is despite the fact that the housing sector, which has become a bright
spot in the economy since home prices began to rebound in 2012, is expected to
provide a rising contribution to GDP in 2013 and in coming years. Recent data
indicate that the housing recovery has transitioned to a faster upward track,
boosted by an improving labor market and low mortgage rates. Overall, home
sales, home prices, and home building activity as well as homebuilder
confidence appear to be on the upswing, having risen to multi-year highs.
"What we view as sub-par economic growth may actually continue to be par for
the course for the near term," said Fannie Mae Chief Economist Doug Duncan.
"We expect the fiscal policy climate to act as a drag on growth this year with
possible implications on the direction of the economy in the long term. As
fiscal policy debates subside later in the spring, we expect to see some
upward trend in economic activity, with growth accelerating moderately in the
second half of the year. That momentum will find support in the form of
continued, albeit slow, improvement in the housing sector. In the longer term,
the gradual return of manufacturing to the U.S. and increasing domestic energy
production will work together to accelerate economic growth. However, we
anticipate overall growth in 2013 will remain below its potential, extending
what has been a slow recovery."
For an audio synopsis of the January 2013 Economic Outlook, listen to the
podcast on the Economic & Strategic Research site at www.fanniemae.com. Visit
the site to read the full January 2013 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
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SOURCE Fannie Mae
Contact: Pete Bakel, +1-202-752-2034
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