While the most recent data on the US economy over the past two months has been mixed, this is most likely due to severe winter weather and does not necessarily counteract the positive trend. Indeed, the acceleration in US GDP growth that began in the third quarter of 2013 continued in the fourth quarter, and sets the stage for a stronger 2014. The real GDP growth of + 3.2% (annual rate) occurred despite a large drag from the federal government sequester and partial shutdown. However, there is agreement on the federal government debt ceiling and on a budget that avoids further spending sequestration, not to mention the potential for government shutdowns. As such, fiscal policy, and the uncertainty around that policy, will not be the drag on GDP growth that it has been in recent years.
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