Economists at Goldman Sachs raised their GDP growth expectations for the U.S. economy to 8% for 2021 in a note to clients on Sunday night.
Why it matters: If Goldman’s forecast is correct, it would mark the largest economic expansion for the U.S. in generations.
What they’re saying: “We have raised our GDP forecast to reflect the latest fiscal policy news and now expect 8% growth in 2021 (Q4/Q4) and an unemployment rate of 4% at end-2021 — the lowest among consensus forecasts—that falls to 3.5% in 2022 and 3.2% in 2023,” Goldman said in the note.
Between the lines: Goldman has been exceptionally bullish on the prospects for U.S. growth all year, far outpacing most other Wall Street banks’ expectations.
By the numbers: A growth of 8% this year would put U.S. GDP at around $22.6 trillion, marking a full recovery after the economy shrank 4.1% in 2020.
Of note: Goldman’s metric tracks fourth quarter over fourth quarter growth, rather than year over year.