Goldman Sachs: Fear Not - The Economy Is Just Fine

by: Cullen Roche

Just some highlights from recent Goldman Sachs commentary…

Chief Economist Jan Hatzius on the horrible GDP report (via BI):

On the investment side, while this is clearly a more weaker-than-expected number, there are a number of more forward looking indicators that are actually quite encouraging so we wouldn't be too worried about this particular number. Also weaker residential investment -7.9% in the fourth quarter, certainly fairly meaningful when taken cumulatively. Overall somewhat weaker than expected - nothing here that would really change our forward-looking outlook significantly. Still think growth will be stronger in coming quarters - forecast for second quarter is 3%, feel broadly okay about that despite this negative surprise."

And on the nonfarm payrolls report coming down in a few hours (via ZH):

We forecast a 220k increase in nonfarm payrolls in April, a touch stronger than the consensus estimate of 215k.

We expect private payrolls increased 215k (vs. consensus 215k).

Payroll gains now stand just shy of 200k for February and March and look poised to come in stronger in April. Notably, the employment components of all ten of the major business surveys released so far rose in April, in every case to a level consistent with increased employment. In addition, jobless claims reached a new post-recession low just prior to the April reference week, and continued normalization of weather conditions in April from a still-chilly March could provide a modest additional boost. We also think it is likely that the April report will include substantial positive back-revisions, as has tended to be the case historically.

In other words, don't get too worked up about some of the negative data we've seen lately….