Goldman Sachs: Prepare For The Economic Slowdown Coming
Published: 2023-10-10
Status:
Available
|
Analyzed
Published: 2023-10-10
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Higher interest rates are predicted to cause a slowdown in the US economy.
"higher interest rates are going to contribute to a Slowdown in our economy"
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Goldman Sachs predicts higher-for-longer interest rates will reduce US economic growth by 0.5%.
"higher for longer interest rates will likely shave half a percent from our United State's economic growth"
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Unprofitable companies may be forced to cut their workforce due to higher interest rates.
"it may Force unprofitable companies to begin cutting their Workforce"
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Higher interest rates are expected to lead to increased unemployment.
"the impact that they can cause is more unemployment"
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Interest rates are not expected to fall even if inflation decreases.
"even if inflation begins to fall don't expect interest rates to fall"
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Goldman Sachs predicts interest rates will not fall even if inflation declines.
"even if inflation Falls don't expect interest rates to fall"
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The US economy is entering a new phase characterized by higher interest rates.
"we are entering a new phase in our economy of higher interest rates"
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The latest US jobs report showed hiring significantly exceeding expectations.
"in our latest jobs report we hired way more people in America than what was expected"
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336,000 new jobs were added in the US, nearly double the expected number.
"336,000 new jobs were added in America which is almost double what was expected"
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Despite job growth, wage growth is significantly slowing.
"although we're seeing growth in jobs wages are slowing pretty significantly"
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Strong job growth could lead the Federal Reserve to take more aggressive action.
"even though we're seeing a growth in jobs that could make the federal reserve banks fight even stronger even harder"
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Average hourly earnings increased by 0.2% month-over-month and 4.2% year-over-year.
"average hourly earnings for workers Rose 0.2% from the previous month and 4.2% from one year ago"
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The year-over-year wage increase was smaller than expected and the slowest since the start of the pandemic.
"this increase in wages was smaller than anticipated and it is the slowest one-year Pace since the pandemic started"
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Policymakers believe a tight labor market will drive up wages and subsequently prices.
"policy makers feel that a tight labor market will continue to put upward pressure on wages which will then push prices higher"
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Strong job numbers are seen as negative for the Federal Reserve, as they aim to increase unemployment.
"when you have strong job numbers that's bad news for the Federal Reserve Bank because the Federal Reserve Bank wants to increase unemployment"
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The Federal Reserve's goal to 'cool down' the labor market implies an increase in unemployment.
"the Federal Reserve Bank wants to cool down the labor market what is cooling down the labor market mean it means higher unemployment"
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The Federal Reserve desires higher unemployment.
"the Federal Reserve Bank wants more unemployment"
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Higher interest rates are predicted to persist for a longer duration than anticipated.
"higher interest rates are expected to stay around for longer than expected"
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Elevated interest rates may result in increased job losses and company layoffs.
"higher unemployed or higher interest rates could lead to then more of job losses more layoffs of companies"
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The current state of the US economy appears very strong.
"the economy still looks very strong"
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The prices of used Rolex watches are predicted to fall significantly.
"prices of things like used Rolex watches really start to fall hard"
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Prices for mid-range luxury used cars, such as G-Wagons, Ford Raptors, and entry-level Lamborghinis (valued between $100k-$300k), are beginning to decline.
"the prices of kind of those mid-range luxury cars and by mid-range luxury cars I mean like your G wagons your Ford Raptors your lowlevel Lamborghinis the the prices of these used cars you know your 100 to2 300000 cars are starting to fall"
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Approximately 40 million Americans have resumed making student loan payments.
"about 40 million Americans have just been hit now with their student loan payments again"
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The impact on consumer spending due to the resumption of student loan payments will be observable in approximately six months.
"about 6 months from now seeing how spending changes because of the new student loan payments again"
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The resumption of student loan payments is expected to negatively impact consumer spending, exacerbating existing consumption challenges caused by inflation.
"it's going to hurt your ability to spend I mean it hurts consumption during a time where consumption is already being hurt because of the inflation"
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Inflation remains higher than anticipated.
"inflation is still hotter than expected"
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Inflation for essential goods like food, gas, and rent is exceeding the 4% wage growth rate.
"inflation for a lot of the products that people need like your food your gas your rent the inflation for these items is more than the 4% that people have been seeing with their wage growth"
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70% of survey respondents indicated they will postpone significant purchases (car, home, vacation) due to student loan obligations.
"70% of the people that responded to the survey said yes that they will be delaying a big ticket purchase like a car a home a vacation due to student loans"
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A shift in the economic landscape is occurring.
"we are seeing a shift in the economy"
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The Federal Reserve remains committed to maintaining high interest rates and may consider another rate hike before the end of the year (2023).
"the F Reserve Bank is still adamant on keeping interest rates high and potentially raising interest rates again before the year ends"
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Consumers will eventually be forced to reduce spending due to rising prices outpacing income growth, leading them to stop accumulating debt.
"as people have to make the decision of okay where do I cut back on my spending because the prices of things keep Rising faster than my incomes eventually people will have to say I can't keep going into credit card debt I can't keep going into my savings I can't keep racking up other sorts of debt I have to make a conscientious spending decision that I have to stop spending because I can no longer afford to spend"
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A slowdown in economic growth is anticipated as consumers reduce spending.
"when that starts to happen you're going to see a Slowdown in economic growth"
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An increase in unemployment is expected as a consequence of the economic slowdown.
"when that happens you will see an uptick in unemployment"
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Increased economic hardship is foreseen as a result of the unfolding economic conditions.
"when that happens you will see an uptick in more more economic pain"
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The Federal Reserve will face a decision between prioritizing inflation control or addressing the slowing economy.
"the Federal Reserve Bank will have to make a decision do you continue to fight inflation or do you fight the slowing economy"
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The Federal Reserve's primary focus is currently on combating inflation.
"the number one focus is inflation"
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