Goldman's Top Economist Answered 10 Questions About 2014 In January -- Here's How He Did

Jan HatziusGoldman SachsJan Hatzius

Goldman Sachs economist Jan Hatzius offered answers for ten key yes or no questions about 2014 back in January.

And today, he followed up with what actually happened.

Overall, he did pretty well. 

We jotted down a quick rundown of his questions and his self-assessment below.

Check it out:

  • Will the US economy accelerate to an above-trend growth pace? Yes.

    BROADLY CORRECT — Through Q3, the pace of growth was 2.4% which was above the 2.2% rate during the same time last year. “Our current activity indicator–a summary of 25 weekly and monthly indicators of US economic activity–accelerated from an average rate of 2.2% in 2013 to an average rate of 3.1% in 2014 so far,” he noted.

  • Will consider spending growth improve? Yes.

    PROBABLY INCORRECT — Personal consumption growth as of October 2014 was below average, but the data could understate the true picture.

  • Will capital spending rebound? Yes.


  • Will the housing market continue to recover? Yes.

    TECHNICALLY CORRECT — Recovery¬†did fall short of expectations, but housing starts, home sales, and house prices have been up modestly for the year.

  • Will the labour force participation rate stabilise? Yes.


  • Will profit margins contract? No.

    UNCLEAR — The ratio of earnings per share to revenue per share rose in 2014, but profit margins in the national income and product accounts declined.

  • Will core inflation stay below the 2% target? Yes.


  • Will QE3 end in 2014? Yes.


  • Will the “dots” shift toward a 2016 rate hike? Yes.

    INCORRECT — “Our own modal forecast for the funds rate liftoff has also moved forward, from Q1 2016 as of late 2013 to September 2015 now,” wrote Hatzius.

  • Will the secular stagnation theme gain for adherents? No.

    UNCLEAR — The US growth pickup in 2014 reflects a “lengthy hangover” that generally follows a large housing and credit bubble, but long-term forwards for the fed funds rate have fallen sharply in 2014.

That’s around a 7 out of 10 (we’ll give the unclear’s a half point here.)

In markets and economics, 70% correct for one-year forecasts is pretty good if you ask us.

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