President-elect Joe Biden
Photographer: Mark Makela / Getty Images
Photographer: Mark Makela / Getty Images
Economists at Goldman Sachs Group Inc. raised their growth forecasts for the US this year and after, after President-elect Joe Biden unveiled a resuscitation plan that predicts $ 1.9 trillion in spending.
In a weekend customer report, economists led by Jan Hatzius predicted that the economy would expand by 6.6% this year, faster than the 6.4% previously expected. The unemployment rate for the end of 2021 is now 4.5%, below the previous estimate of 4.8%.
The update is fueled by the expectation that Biden, aided by a Democratic-controlled Congress, will deliver ample amounts of state tax aid, education and public health spending, as well as unemployment insurance benefits, to combat the damage of a pandemic now under way. its most devastating form so far. Goldman’s estimate for 2021 economic growth is the second highest in a Bloomberg survey of 84 economists; the median estimate is 4.1%.
Although economists do not expect all parts of Biden’s proposal to be approved, they predict that an additional $ 1,400 in individual stimulus payments will cause a “huge increase” in disposable income in the first three months. On Thursday, Goldman raised its estimate to the value of The Biden stimulus will gain to $ 1.1 trillion, compared to an earlier forecast of $ 750 billion.
“We now project that nominal disposable income will grow by 2021 + 4.5%” against the previous estimate of 3.8%, according to Goldman’s last note.
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Goldman expects gross domestic product growth of 4.3% in 2022 and 1.6% in the following year. “We have made no changes to our Fed forecast and we continue to expect that the gradual reduction will not begin until 2022 and that takeoff will occur in the second half of 2024,” said economists, referring to the previous prediction of when the Federal Reserve will raise interest rates.
Brian Deese, new director of the Biden National Economic Council, warned on Sunday that the US economy is “spiraling” and called for quick action.