Fannie Mae Projects Modest Growth Forecast for 2015

Julie C. Nichols General

The M Report – Brian Honea

Despite slower economic growth in recent months following a strong showing in mid-2014, Fannie Mae’s Economic and Strategic Research Group said in a report released Thursday that it still expects 2015 to be a slightly better year overall economically in the United States.

The group’s current forecast was based on continued improvements in employment, income, and consumer and business spending. The group predicted that economic growth will come in at 2.5 percent for 2015, which is a slight improvement over the 2.1 percent predicted for 2014.

"The pace of growth around the middle of the year was well above trend, driven by an unsustainable rebound after a weak first quarter, and we anticipate that the fourth-quarter numbers will presage a more modest pace for 2015," said Doug Duncan, chief economist for Fannie Mae. "We are still seeing some conservatism on the part of consumers, who remain hesitant to take on significant credit and mortgage debt in the wake of the economic downturn. However, recent data show that their confidence is growing amid strengthening employment numbers and household incomes, which we expect to continue next year and eventually drive stronger consumption."

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