Goldman Sachs and a team of the bank's economists, led by Jan Hatzius, released their predictions for the US economy in 2020. Our CFO Alliance Members discussed and debated these findings throughout our Q4 Series. Here's what the economists had to say:
- The US-China trade war to subside and consumer spending to remain strong, offsetting weak business investment which will in turn cause growth to accelerate.
- Growth is expected to accelerate to 2.25-2.50%.
- Unemployment will drop to its lowest level since the Korean War.
- The bank is forecasting unemployment to hit 3.25% by the end of 2020.
- More jobs will continue to be created and wage growth should continue to rise gradually, especially at the lower end.
- Wage growth should also rise by about 3.5%, with those on lower incomes set to gain the most.
- The risk of a recession will drop from one in three earlier this year to one in five or 20%.
- The bank expects fund rates to remain unchanged in 2020.
- Goldman says next year's elections are "likely to be the single biggest event for financial markets in 2020."
- While the incumbent usually stays in office, Donald Trump is battling low approval ratings.
- If one of the four frontrunners for the Democratic nomination does win the general election (Bernie Sanders, Joe Biden, Pete Buttigieg, and Elizabeth Warren), Goldman thinks the federal corporate income tax rate would most likely be upped from 21% back toward 35%.
Check out the full article here
to learn more Goldman Sachs' predictions for the US economy in 2020.
How does your sentiment compare to the economists' predictions and the sentiment of your peers? Participate in The CFO Alliance 2020 Sentiment Study and receive a complimentary copy of the Report when it is released on 1/15/20.