Goldman Sachs lifts US GDP forecast to 6.6% in 2021 on Biden's $1.9 trillion stimulus package
Goldman Sachsraised its US GDPforecast to 6.6% on Joe Biden's $1.9 trillion stimulus plan.
- Bank economists now project a lower US unemployment rate of 4.5%, down from 4.8%.
- Biden's $1,400 stimulus checks will cause a "large spike" in disposable income, they said.
Goldman Sachs has turned even more optimistic on the outlook for the US
In a weekend note to clients, economists at the bank raised their forecast for US GDP to 6.6% in 2021 from 6.4%. Goldman now expects a lower US unemployment rate of 4.5% at the end of 2021, down from 4.8%.The projected economic expansion will be fueled by a boost in disposable incomes and government spending, the bank said, as Biden's $1.9 trillion stimulus plan accentuates his intent to shore up the slumping US economy.
"We now forecast nominal disposable income will grow in 2021 by +4.5%," up from a prior estimate of 3.8%, the economists wrote.After the Democrats won control of the Senate in the first week of this year, the bank raised its US GDP forecast to 6.4% because of the prospect of more fiscal stimulus to combat the fallout from coronavirus. Goldman expects a 4.3% growth for the US economy in 2022 and 1.6% growth in 2023. Read More: Bank of America says the warning signs that stocks are hurtling into bubble territory are growing - and pinpoints 6 that could signal a bear market is beginning
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