Goldman Sachs Analyst Says U.S. Economy Likely to Be “Fairly Bad” to “Very Bad” in Short Term
Jan Hatzius, the chief U.S. economist for Goldman Sachs Group, has two economic outlooks for the nation over the next six to nine months: “fairly bad” to “very bad”.
In the fairly bad scenario, Hatzius says that the unemployment rate will continue to rise at a moderate pace to about ten percent, and economic growth will be at a 1.5 to 2 percent snail’s pace. In the very bad scenario, the U.S. economy would return to a full recession.
Hatzius said that he believes the Federal Reserve will probably make some kind of move to hasten growth in early November at its next meeting. This may include increased Treasury purchases to keep borrowing costs low.
While he noted that the “fairly bad” outlook is the one he believes is more likely to occur, Hatzius did say that he thinks the odds of a renewed recession have risen from 15 to 20 percent at the beginning of this year to 25 to 30 percent today.
Fed Chairman Ben Bernanke said earlier this month that he believes the Fed has an obligation to help the economy as long as unemployment hovers around the 10 percent mark.
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