On Friday, Goldman Sachs economists expressed concerns about two potential negative shocks for the U.S. economy:
"We are particularly concerned about two potential negative shocks— one of which has already materialized to some degree. First, a worsening of the European financial crisis would hurt the economic outlook globally. Second, our forecast assumes that the payroll tax cut is extended for another year; if that failed to happen, the fiscal drag in early 2012 would rise significantly."
Goldman Sachs, November 11, 2011
These are downside risks to Goldman's forecast of about 1% GDP growth in the first half of 2012 - already a very weak forecast!
On the second point, additional fiscal stimulus might depend on the so-called "super committee" that has a November 23rd deadline. I have little confidence in the committee..
Read more: http://www.businessinsider.com/two-big-risks-still-facing-the-economy-2011-11
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