+

Cookies on the Business Insider India website

Business Insider India has updated its Privacy and Cookie policy. We use cookies to ensure that we give you the better experience on our website. If you continue without changing your settings, we\'ll assume that you are happy to receive all cookies on the Business Insider India website. However, you can change your cookie setting at any time by clicking on our Cookie Policy at any time. You can also see our Privacy Policy.

Close
HomeQuizzoneWhatsappShare Flash Reads
 

GOLDMAN: Here's What Will Happen With GDP, Housing, The Fed, And Unemployment Next year

Dec 29, 2013, 17:04 IST

Goldman Sachs chief economist Jan Hatzius writes: 10 Questions for 2014 (Here are the 10 questions at Business Insider: Goldman's Top Economists Just Answered The Most Important Questions For 2014 - And Boy Are His Answers Bullish)

A few excerpts from the research note:

Advertisement

We expect the US economy to accelerate to an above-trend growth pace in 2014, as the fiscal drag diminishes sharply but the private sector impulse remains positive. The acceleration is likely to be led by faster growth in personal consumption and business capital spending, with continued support from housing.

The unemployment rate is likely to fall about as fast as in 2013, with faster job growth offset by a flattening in labor force participation. But we expect the slack in the labor market to remain large enough in 2014 to keep wage growth subdued, profit margins high, and inflation well below the Fed's 2% target.

The Federal Reserve is likely to conclude its QE3 program in late 2014. But we still see no hikes in short-term interest rates until early 2016 ...

Goldman is projecting around 3% GDP growth in 2014. A similar drop in the unemployment rate next year as in 2013 would put the rate in the low 6% range.

And on housing:

Advertisement

Barring another sharp increase in mortgage rates, we think that the upward trend should continue in 2014 because the longer-term fundamentals for housing activity remain very favorable. ... We are a bit less optimistic about house prices. ... we would expect somewhat slower growth of 5%-6% in 2014-still decent but no longer nearly as rapid as the double-digit rates seen over the past 12-18 months.


Read more at http://www.calculatedriskblog.com/2013/12/goldman-sachs-10-questions-for-2014.html#ZYvlHwgWEkerMlK5.99

More from Calculated Risk:

You are subscribed to notifications!
Looks like you've blocked notifications!
Next Article