Goldman Sachs' Jan Hatzius on Economic Outlook and Job Creation

Strategic Insights -

Jan Hatzius, Chief Economist at Goldman Sachs, shared his outlook on the economy and job creation during an interview on Bloomberg TV on February 15, 2011. Hatzius emphasized that despite the risks and challenges, the global economy and the US economy are expected to grow at a moderate pace. He noted that the global economy is expected to grow at around 5% in the current year, and 3.5-4% in the US in the next two years.

Key Takeaways:

  • The global economy is expected to grow at around 5% in the current year, with the US economy growing at 3.5-4% in the next two years.
  • Food price inflation is a concern, but it is not yet fully reflected in the US inflation data.
  • The labor market is expected to improve, with job creation picking up, although the unemployment rate is not expected to reach pre-2007 levels until the end of 2012.
  • Consumer spending growth is expected to slow down in the first quarter, but pick up in the next year or so.
  • Investors may see a buying opportunity in the market, with Goldman Sachs' strategists expecting the S&P 500 to rally to 1,500 by the end of the year.
  • The current inflation trend is expected to remain low, despite the potential for higher headline inflation numbers due to food price inflation.

Statistics:

  • Global economy growth: 5% in the current year
  • US economy growth: 3.5-4% in the next two years
  • Unemployment rate: expected to reach 8% by the end of 2012
  • Consumer spending growth: expected to slow down in the first quarter, but pick up in the next year or so
  • S&P 500 index: expected to rally to 1,500 by the end of the year
  • Job creation: expected to pick up, with 200,000 to 250,000 non-farm payrolls created in the second half of the year

Sources:

  • Bloomberg TV
  • Interview with Jan Hatzius, Chief Economist at Goldman Sachs
  • Bloomberg News
  • Goldman Sachs
  • Federal Reserve Bank of Richmond
  • US Bureau of Labor Statistics