Goldman Sachs is growing more pessimistic about an economic plunge — but more optimistic about a rebound
Goldman Sachs' outlook for the United States economy in the short-term has grown bleaker.
The investment bank is now estimating the U.S. GDP will contract 34 percent from the previous quarter between April and June because of the effects of the novel coronavirus pandemic. That's a pretty significant shift from it's previous 24 percent projection, which, as CNN notes, was already a shockingly severe estimate.
Goldman switched things up because it now thinks the U.S. labor market is bracing for a heavier-than-anticipated collapse — it expects unemployment to rise to 15 percent by the middle of the year, rather than 9 percent as earlier estimates showed.
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But a harsher fall also means a stronger rebound. The bank now thinks the economy will rebound even more sharply between July and September, though that likely comes with the caveat that the U.S. continues to manage and suppress the pandemic, allowing people to get back to work so commerce can start revving again. Read more at CNN.
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Tim is a staff writer at The Week and has contributed to Bedford and Bowery and The New York Transatlantic. He is a graduate of Occidental College and NYU's journalism school. Tim enjoys writing about baseball, Europe, and extinct megafauna. He lives in New York City.
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