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President-elect Joe Biden
Photographer: Mark Makela / Getty Images
Photographer: Mark Makela / Getty Images
Economists at Goldman Sachs Group Inc. have raised their growth forecasts for the United States this year and beyond after President-elect Joe Biden unveiled a sweeping stimulus package calling for $ 1.9 trillion in spending.
In a weekend report to clients, economists led by Jan Hatzius predicted that the economy would grow 6.6% this year, faster than the previously expected 6.4%. The unemployment rate for the end of 2021 is now estimated at 4.5%, down from the previous estimate of 4.8%.
The upgrade is fueled by hopes that Biden, helped by a Democratic-controlled Congress, will provide ample amounts of state tax assistance, education and public health spending, as well as benefits unemployment insurance, to counter the damage caused by a pandemic now at its most devastating. step to date. Goldman’s estimate for 2021 economic growth is the second highest in a Bloomberg survey of 84 economists; the median estimate is 4.1%.
While economists don’t expect all parts of Biden’s proposal to pass, they predict that an additional $ 1,400 in individual stimulus payments will lead to a ‘sharp rise’ in disposable income in the first three months . Goldman on Thursday raised its estimate of the amount of Biden stimulus will rise to $ 1.1 trillion, from a previous forecast of $ 750 billion.
“We now expect nominal disposable income to increase in 2021 by + 4.5%” from 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 haven’t made any changes to our Fed forecast, and continue to expect that the reduction will not begin until 2022 and that the take-off will occur in the second half of 2024,” the economists said, referring to their previous forecast on when the Federal Reserve will raise interest rates.
Brian Deese, new director of Biden’s National Economic Council, warned on Sunday that the US economy was “spiraling” and called for swift action.
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