Senate Majority Leader Mitch McConnell speaks on the Senate floor, directing coronavirus stimuli, direct investigations into U.S. households, Article 230 and electoral integrity.
The new COVID-19 aid will give the US economy a bigger boost than initially expected, according to Goldman Sachs.
The $ 900 billion analysis package will help grow U.S. gross domestic product by 5% annually in the first quarter and 5.8% next year, analysts say. Goldman had earlier expected a $ 700 billion package to succeed just after Inauguration Day, to grow GDP by 3% in the first quarter and by 5.3% in the coming year.
“The biggest difference compared to our previous assumption is the inclusion of stimulus tests, which now implies a large increase in disposable income” in the first quarter followed by a successive decline in the second and third quarters, writes a research team from Goldman Sachs under the leadership of Chief Economist Jan Hatzius.
REPUBLICANS FEAR MESSAGE WILL DESTROY TRUMP’S ECONOMIC PROFIT
The assistance package includes a direct payment of $ 600 to most Americans, an additional $ 300 per week in unemployment benefits through March, the Paycheck Protection Program loans for small businesses and other benefits.
A direct payment of $ 2,000, backed by President Trump and already by the House of Representatives, could soon be voted on.
Goldman says the increased payment will “significantly” increase disposable income in the first quarter to higher than that of the second quarter of this year when the $ 1,200 stimulus checks were handed out. The firm did not provide a forecast in the event that the payment of $ 2,000 came through.
CLICK HERE FOR THE FOX NEWS APP
Although Goldman’s forecast is well above the Wall Street consensus of 2.5%, it will still make a sharp slowdown to the current growth rate.
The Federal Reserve Bank of Atlanta’s GDPNow model, which tracks real GDP based on available economic data for the current quarter, says the U.S. economy is tracking 10.4% growth for the last quarter of 2020. An updated model will be announced on January 4th.
This follows the record growth of 33.4% experienced in the third quarter, after governments eased closures to slow the spread of COVID-19. These barriers caused the economy to shrink at a record rate of 32.9% during April to June.