“The report has soft landing written all over it.” “The August jobs report couldn’t be much better,” Moody’s Analytics chief economist Mark Zandi wrote Friday on X, formerly known as Twitter. The August jobs report, released late last week, showed that hiring remains solid, though it has slowed from the blockbuster pace of earlier in the post-pandemic recovery.Īnd while the unemployment rate jumped from 3.5% to 3.8% in August, Hatzius said Goldman Sachs is “unconcerned” by the increase because it was “entirely driven” by an increase in the supply of people looking for work. The Fed's preferred inflation measure stayed high in July - and consumers are continuing to spend Photographer: Jamie Kelter Davis/Bloomberg via Getty Images Jamie Kelter Davis/Bloomberg via Getty Images US retail sales rose in July by more than forecast, suggesting consumers still have the wherewithal to sustain the economic expansion. Shoppers carry retail bags along the Magnificent Mile shopping district in Chicago, Illinois, US, on Tuesday, Aug. That’s crucial in an economy where consumer spending is the main driver of growth. In other words, paychecks will grow faster than prices, giving consumers the ability to keep spending. Goldman Sachs pointed to “solid” job growth and rising real (inflation-adjusted) wages that should allow real disposable income to “reaccelerate” next year. “But we expect the slowdown to be shallow and short-lived,” Hatzius said. Hatzius wrote that GDP tracking tools like the Atlanta Fed’s GDPNow model, which is calling for booming growth of 5.6% in the third quarter, likely “overstates the economy’s true momentum.” He added that growth will likely cool off in the fourth quarter as student loan payments resume and the mortgage rate spike hurts housing. The Bloomberg consensus of economists is still calling for a 60% chance of a recession. Goldman Sachs says it is “substantially more optimistic” than most forecasters. Wall Street economists have been forced to repeatedly postpone or even cancel their recession forecasts as the economy proves resilient. Hatzius added that Goldman Sachs is increasingly confident that the Fed is “done” raising interest rates as unemployment rises, wages slow and inflation eases. “In fact, we think the drag from monetary policy tightening will continue to diminish before vanishing entirely by early 2024.” “We strongly disagree with the notion that a growing drag from the ‘long and variable lags’ of monetary policy will push the economy toward recession,” Jan Hatzius, Goldman’s chief US economist, wrote in the report. The US economy continued to add jobs at a robust pace last month Photographer: Al Drago/Bloomberg via Getty Images Bloomberg/Bloomberg/Getty Images/FILE Surveys suggest that despite cooling inflation and jobs gains, Americans remain deeply skeptical of the president's handling of the post-pandemic economy. A help wanted sign on a storefront in Ocean City, New Jersey, US, on Friday, Aug.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |