President Trump has recently offered a few choice words on the work from Goldman Sachs' economics team, led by long-time economist Jan Hatzius.
The team is unlikely to garner some praise from Trump today. What Hatzius and his team served up in a new note this morning….
“After the recent downward revisions to payrolls, our estimate of trend job growth is now clearly below even that low bar at 30k per month. And while the picture could change again for better or worse, future revisions to job growth are more likely to be negative because the birth-death model is likely a bit too generous, changes in trend payroll growth can initially be partially misattributed to changes in seasonal factors, revisions to the raw payrolls data tended to be negative in past slowdowns, data from ADP raise doubts about officially reported payroll growth in healthcare, and the household survey is now overstating immigration and employment gains.
The outlook for job growth has dimmed too. Like the slowdown in activity growth this year, the slowdown in job growth appears to have arisen from more than just the direct effects of trade and immigration policy changes. We are particularly worried that “catch-up hiring” in a few industries now appears over and job growth outside those industries has fallen to around zero. And while job openings remain at a decent level, they started to decline again earlier this year.”
