The investment bank revised down its predictions for the U.S. economy as the coronavirus pandemic continues to cause unprecedented damage.
As the full impact of the coronavirus crisis on the American economy becomes more clear, analysts at Goldman Sachs have revised their outlook downward.KEY FACTS
The investment bank now expects the unemployment rate to peak at 25%—on par with levels seen during the Great Depression—rather than the 15% it was anticipating previously. Goldman also revised down its forecasts for GDP: it’s now expecting GDP to plummet 39% in the current quarter, slightly more than the 34% drop it expected before. Much of the economic damage comes down to changing consumer behavior—spending at restaurants likely dropped by more than half in March and April, analysts say, and healthcare spending also fell as people cancelled elective procedures.
Manufacturing output also fell 26% in April as auto production came to a near standstill. Even industries unconnected to the virus, like professional services, took a hit thanks to stringent social distancing measures. Goldman estimates that spending on transportation, entertainment, and hotels—the industries that have been hardest-hit by the coronavirus—dropped by 80-95% during March and April.
“Limited evidence about how effective these measures are relative to lockdown, insufficient testing and contact tracing capacity in some states, and decisions in some states to reopen relatively high risk sectors early all present serious risks,” the analysts wrote.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Goldman Sachs Now Says Unemployment Will Peak At 25%, GDP To Fall 39% In The Second QuarterThe investment bank revised down its predictions for the U.S. economy as the coronavirus pandemic continues to cause unprecedented damage.
Read more »
Goldman Sachs issues warning about US unemploymentCNN News, delivered. Select from our newsletters below and enter your email to subscribe.
Read more »
This new unemployment forecast rivals the depths of the Great DepressionThe unemployment rate in the US will peak at 25%, rivaling the worst period of the Great Depression, Goldman Sachs warns.
Read more »
Saudi Aramco first-quarter net profit slides 25% as oil prices fallSaudi Arabian state oil giant Aramco on Tuesday reported a 25% fall in first-quarter net profit, below analyst estimates, hurt by lower crude oil prices as the coronavirus slashed demand.
Read more »
Saudi Aramco profit falls 25% but dividend in line with planned payout for yearSaudi Aramco, the world's top oil exporting company, on Tuesday reported a 25% fall in first-quarter net profit, missing analyst estimates, but its quarterly dividend was in line with a plan for a $75 billion payout for the year.
Read more »
Goldman Sachs says the only other commodity 'looking as precarious as oil' is livestockThe forecast comes at a time when the coronavirus pandemic has prompted many countries across the globe to effectively shut down.
Read more »