Goldman Sachs Raises US Q3 Economic Growth Forecast by 1%P on 'Better-than-Expected Economic Indicators'

[Photo by Reuters-Yonhap News]

[Asia Economy Reporter Park Byung-hee] Goldman Sachs has raised its forecast for the US third-quarter economic growth rate by 1 percentage point this year, based on better-than-expected economic indicators, according to major foreign media reports on the 5th (local time).

In a report released that day, Goldman Sachs raised its forecast for the US third-quarter economic growth rate from 0.9% to 1.9%.

Goldman Sachs explained that the reason for the upward revision of the economic growth forecast was the better-than-expected September private employment data and August trade deficit released that day.

The US private employment data company Automatic Data Processing (ADP) announced that private sector jobs increased by 208,000 in September. The number of job increases rose by 12.4% compared to August. The US Department of Commerce reported an August trade deficit of $67.4 billion, down 4.3% from July, marking the smallest deficit since May last year.

However, the better-than-expected employment data could stimulate inflation, which means the central bank, the Federal Reserve (Fed), may tighten monetary policy further. With the Fed having already decided on three consecutive giant steps (raising the benchmark interest rate by 0.75 percentage points), continued high-intensity tightening could rapidly cool the economy.

In a separate report released that day, Goldman Sachs estimated the probability of the US economy entering a recession within the next 12 months at 35%.

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