President-elect Joe Biden
Photographer: Mark Makela / Getty Images
Photographer: Mark Makela / Getty Images
Goldman Sachs Group Inc. economists they increased their growth forecasts for the United States this year and later after President-elect Joe Biden unveiled a comprehensive renaissance plan calling for $ 1.9 trillion in spending.
In a weekend report to customers, economists led by Jan Hatzius predicted that the economy would expand by 6.6% this year, faster than the 6.4% previously forecast. The unemployment rate at the end of 2021 is now at 4.5%, down from the previous estimate of 4.8%.
The update is fueled by the hope that Biden, aided by a Democratic-controlled Congress, will deliver large amounts of state tax aid, education and public health spending, as well as unemployment insurance benefits, to offset the damage from a pandemic that is now the most devastating. stage to date. Goldman’s estimate for 2021 economic growth is the second highest in a Bloomberg survey of 84 economists; the average estimate is 4.1%.
While economists do not expect all parts of Biden’s proposal to pass, they predict that an additional $ 1,400 in individual stimulus payments will cause a “large rise” in disposable income in the first three months. On Thursday, Goldman raised its estimate by the amount of the Biden stimulus will earn up to $ 1.1 trillion, compared to the previous forecast of $ 750 billion.
“We now forecast that disposable nominal income will grow by +21% in 2021” compared to the previous estimate of 3.8%, according to Goldman’s latest note.
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Goldman expects gross domestic product growth of 4.3% in 2022 and 1.6% the following year. “We have not made any changes to our Fed forecast and we continue to expect that the slowdown will not begin until 2022 and that the withdrawal will occur in the second half of 2024,” economists said in reference to their previous forecast on when the Federal Reserve will raise interest rates.
Brian Deese, Biden’s new director of the National Economic Council, warned Sunday that the U.S. economy is “spiraling down” and he called for swift action.