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Tuesday, November 13, 2018

Goldman: Unemployment rate down to 3% in early-to-mid 2020

by Calculated Risk on 11/13/2018 02:03:00 PM

A few brief excerpts from a Goldman Sachs research note:

Following the remarkable momentum in job growth, we update our estimate of the breakeven payroll pace that stabilizes the unemployment rate and estimate how long it will likely take before we get there.

We estimate the pace of breakeven payrolls at 90k per month, less than half the pace of realized job growth in recent months. ... Combined with our GDP forecasts, the analysis suggests that job creation will reach its breakeven pace in early/mid-2020, when the unemployment rate in our forecast is down to just 3%.
CR Note: Goldman also thinks the Fed will raise rates by 25bps five more times in this cycle (maybe more).