President-elect Joe Biden
Photographer: Mark Makela / Getty Images
Photographer: Mark Makela / Getty Images
Economists Goldman Sachs Group Inc. they raised their growth forecasts for the US this year and not just after President-elect Joe Biden unveiled a comprehensive $ 1.9 trillion recovery plan.
In a weekend report to customers, economists led by Jan Hatzius predicted that the economy will expand by 6.6% this year, faster than 6.4% previously expected. The unemployment rate at the end of 2021 is now observed at 4.5%, down from the previous estimate of 4.8%.
The update is fueled by expectations that Biden, aided by a Democratic-controlled Congress, will provide large sums of state tax aid, education and public health spending, as well as unemployment insurance benefits, to offset the damage caused by a pandemic. now in its most devastating period. stage so far. Goldman’s estimate for economic growth in 2021 is the second largest in a Bloomberg survey of 84 economists; the median 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 increase” in disposable income in the first three months. On Thursday, Goldman raised its estimate for the amount of the Biden stimulus will earn $ 1.1 trillion, up from the previous forecast of $ 750 billion.
“We now forecast that nominal disposable income will increase by + 4.5% 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% next year. “We have not made any changes in the Fed’s forecasts and we continue to expect that the reduction will not begin until 2022 and that take-off will take place in the second half of 2024,” the economists said, referring to the previous forecast of when the Federal Reserve will raise interest rates.
Brian Deese, the new director of Biden’s National Economic Council, warned on Sunday that the US economy was “spiraling down” and he called for swift action.