Jan Hatzius, Goldman Sachs’s chief U.S. economist, sees the second half of 2010 posing more threats to the recovery than the first, with the withdrawal of stimulus and changes in the inventory cycle set to be a drag on the economy.
He says its going to take a major shock to rock the recovery completely, however.
- 0:21 The small business numbers are clearly weaker, and point to how serious the gap is between large and small firms
- 1:05 We can have a real economic recovery even though small business numbers are bad, but we don’t expect it to grow that quickly
- 1:45 We have some upside risk to first quarter retail sales
- 2:30 Personal saving rates are still really low, but the statistics don’t include housing expenditures, and if you count them, then savings rates make more sense
- 3:15 Losing the fiscal stimulus in the second half of the year and inventory cycle changes may hurt the recovery in the second half of 2010
- 3:30 It will take a new shock to the broader economy to really hurt the recovery
- 4:15 Fed interest rate hike in 2011 has a less than a 50% probability
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