Fiscal drags such as the sequester may have weakened economic momentum, but the economy should “reaccelerate” in the second half of this year as financial and housing conditions improve, according to Fannie Mae’s Economic and Strategic Research Group.
In its most recent economic outlook, the group revealed expectations for the economy to continue the modest recovery and grow 2.2 percent this year, up from 1.7 percent in 2012 and 2 percent in 2011.
“Employment numbers are getting better, albeit it at a relatively slow pace, and the April employment picture should help boost consumer sentiment toward the economy overall. Spending grew in the first quarter at a surprisingly strong pace, and although this rate is unlikely to hold up, consumers continue to show signs of resilience in the face of fiscal concerns,” said Doug Duncan, chief economist for Fannie Mae.