Goldman Sachs Expects A Jump In US GDP In The Second Quarter
Goldman Sachs lowered its forecast for US GDP growth in the second quarter from 33% to 25% year-on-year, mainly due to concerns that the growth in the number of infected people in States such as Florida, Texas, and Arizona will slow the pace of re-opening businesses, writes CNBC.
Despite the decline in the forecast, if it is correct, it will still be the best growth for the quarter since 1947 and only the increase in the number of cases of coronavirus restricts the growth of the economy, which otherwise would not have been threatened, the newspaper notes.
According to Goldman chief economist Jan Hatzius, the decline in the forecast is the result of several factors at once, such as a significant increase in the number of patients, despite the large scale of testing across the country, the likely introduction of quarantine measures again based on data from the centers for disease prevention in the United States, showing that not only new cases of coronavirus infection, but also positive test indicators, frequent visits to doctors due to symptoms similar to COVID-19 symptoms, and overloaded hospitals — all of this has deteriorated significantly over the past few weeks.
For the first quarter, US GDP fell by 5% due to the recession, which was caused by urgent measures to stop the spread of the coronavirus. And since the fourth quarter of 2008 — the global financial crisis-this has been the largest quarterly drop in GDP.
However, Hatzius remains positive, as the labor market added 4.8 million jobs in June, the unemployment rate fell to 11.1%, and manufacturing and construction quickly returned to growth after suffering the worst fall since the financial crisis of 2009. Medicine also does not stand still, and along with the development and testing of the vaccine, many States are re-introducing quarantines, which can lead to a decrease in the virus's reproduction rate below the critical 1 mark for it.
As for the political tension between the US and China, even if it persists, regardless of the results of the presidential election in November, a re-escalation of the trade war is unlikely, but the prospects for international cooperation on such vital issues as climate change will improve.
At the same time, Goldman expects US stocks to perform worse than their global competitors, as the US "lags in the short term, as it partially cancels unnecessarily hastily opened businesses in the consumer sector."