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2014 Economy and Housing: From Deep Hole to Whimper

Referring to its “roller-coaster
pattern of economic growth,” Fannie Mae summarized the economy and housing in
2014 as a year that started with a deep hole and ended with a whimper.  A brutally cold first quarter put economic
growth in that deep hole at the beginning but it came back “with a vengeance”
making the second quarter the strongest for growth in more than two years.  The third quarter saw growth flag again and
it “is poised to
weaken further, as some unsustainable forces that drove activity in the third quarter
reverse in the final quarter.”

Fannie Mae’s Macroeconomic Forecasting
Team headed by Senior Vice President and Chief Economist Doug Duncan reprise
2014 in the December edition of its Economic and Strategic Research
report.  They see the year overall as one
in which economic growth comes in at what they call an unspectacular pace of
2.1 percent, 1 percentage point below the 2013 pace.  Next year however will be better, driven by improving
private domestic demand, a better outlook for consumer income, rising consumer
and business confidence, a broadening housing recovery and they expect full
year 2015 growth of 2.7 percent.

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