Goldman Gets Bullish on the U.S. Economy
Suddenly, the U.S. economy is looking pretty good. Goldman Sachs has also declared this in a memo to clients this week. Zero Hedge managed to acquire that e-mail, for those of us who can't afford to pay for its advisory services. The bank is very upbeat and has shifted its growth targets considerably upwards. Its analysts believe that demand is accelerating very rapidly, and that we'll see it grow at a 5% annualized rate in the fourth quarter. Here's why:
Our explanation is that the pace of private-sector deleveraging is slowing in an environment of somewhat lower debt/income ratios, improving credit quality, and moderating lending standards. In turn, the rise in spending relative to income is starting to generate positive multiplier effects via a stronger labor market, and this is feeding back into stronger income growth. Thus, we have also seen a notable improvement in jobless claims and (at least through October) in nonfarm payrolls.
Read the full memo at Zero Hedge.