The Goldman Sachs Group Inc. expects the fourth quarter of 2020 to be another challenging period for the US economy. Thus, the bank’s economists halved their fourth-quarter gross domestic product outlook.
Goldman Sachs had to revise its forecast due to the lack of new fiscal support for the American economy. As a result, the fourth quarter US GDP outlook was downgraded by 3% compared to the previously estimated 6%.
Nowadays, the US economy is facing a political and economic challenge. For several months, representatives of the Democratic and Republican parties have not been able to agree on an additional relief package. Goldman Sachs experts believe that the current situation is having a profound impact on gross domestic product and slows down the American economy.
The unwillingness of the US Congress to introduce extra financial assistance to the national economy only makes things worse. This week, the United States House of Representatives signed a spending bill that would fund the government through December 11, 2020. Earlier, Goldman Sachs expected the House to approve a $1 trillion stimulus package assuming that it would include the partial extension of the extra unemployment benefit and additional Paycheck Protection Program (PPP) loans.
Analysts suggest that when all unemployment benefits are paid, further fiscal stimulus will be postponed until 2021.
