President Joe Biden
Photographer: Mark Makela / Getty Images
Photographer: Mark Makela / Getty Images
Economists built Goldman Sachs Group Inc. their growth forecasts for the U.S. this year and beyond after President Joe Biden unveiled a comprehensive recovery plan calling for $ 1.9 trillion in spending.
In a weekend report to clients, economists led by Jan Hatzius expected the economy to grow 6.6% this year, faster than the 6.4% previously expected. The unemployment rate at the end of 2021 is now seen at 4.5%, down from the preliminary estimate of 4.8%.
The update is prompted by the expectation that Biden, backed by a Democratically controlled Congress, will deliver enough state fiscal support, education and public health spending, as well as unemployment insurance benefits, to help the against damage from a pandemic is now in its most destructive phase. level so far. Goldman’s estimate for 2021 economic growth is the second highest in Bloomberg’s study of 84 economists; the median estimate is 4.1%.
While economists don’t expect every part of Biden’s proposal to pass, they predict that an additional $ 1,400 in individual incentive payments will provide a “big spike” in revenue- disposable in the first three months. On Thursday, Goldman raised its estimate for what it was Biden’s stimulus gains to $ 1.1 trillion, up from a previous forecast of $ 750 billion.
“We now expect nominal disposable revenue to grow in 2021 by + 4.5%” compared to the previous estimate of 3.8%, according to Goldman’s latest note.
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Goldman expects full domestic product growth of 4.3% in 2022 and 1.6% next year. “We have not made any changes to our Fed forecast, and we expect tapering not to begin until 2022 and construction to occur in the second half of 2024,” the economists said, noting on their part previous forecast of when the Federal Reserve will raise interest rates.
Brian Deese, the new director of the Biden National Economic Council, warned on Sunday that the US economy is “spinning down” and call for swift action.