Goldman Sachs slashes forecasts for next quarter, now sees 34% GDP contraction and 15% unemployment
Mar 31, 2020, 12:56 PM
US gross domestic product will shrink by 34% in the second quarter as the coronavirus outbreak fuels a worse-than-expected hit to the labor market, Goldman Sachs said on Tuesday, Mar 31.
The bank initially forecast a 24% hit to GDP in the period but lowered its estimate based on the “sky-high jobless claims numbers” released on Thursday, Apr 2.
The team led by Jan Hatzius said that unemployment would quadruple to hit 15% by the second half of the year as layoffs continue.
Goldman sees GDP surging 19% in the third quarter as the government’s fiscal and monetary easing drives a “bigger rebound” than previously forecast.