Democratic Bastion Goldman Sachs Predicts Continuing Poor Economic Performance

Down, down, down.

Following another week of weak economic data, we have cut our estimates for real GDP growth in the second and third quarter of 2011 to 1.5% and 2.5%, respectively, from 2% and 3.25%. Our forecasts for Q4 and 2012 are under review, but even excluding any further changes we now expect the unemployment rate to come down only modestly to 8¾% at the end of 2012.

[Discussion of short-term, temporary factors, such as auto supply disruptions due to the Japan Nuke Disaster, omitted; report notes that failing economy cannot be explained entirely by such temporary factors]

...final demand growth has slowed to a pace that is typically only seen in recessions.... Moreover, if the economy returns to recession—not our forecast, but clearly a possibility given the recent numbers …

Obama's obvious play here is to claim the economy was growing, until... those wicked Republicans took over the House in January 2010, and then they undid all his terrific work.

It's obvious, but I don't think many are going to buy that jazz. Obama promised some strong growth in 2011, for example:

Starting in 2011, with Obamanomics fully in gear and the recession over, growth would take off. GDP would rise 4.3 percent in 2011, followed by … 4.3 percent growth in 2012 and 2013, too! And 2014? Another year of 4.0 percent growth. Off to the races, America.

But I don't see what else they can say.

posted by Ace at 09:30 AM

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