Goldman Sachs: While consumption is high, there is hope for the economy

According to the bank, if the market has become "nervous" alongside the American economy, nothing is lost.

Wall Street's stunning volatility has pushed the shares into a correction zone and raised further fears and concerns about the upcoming 2019. Although falling stock prices and rising interest rates will continue to monetize, these negatives are likely to be offset by rising wages and the retreat of oil prices. These are key milestones that will drive consumption and will send a positive signal at least about the medium-term horizon.

First, available revenues will continue to rise due to rising wages and depreciation of oil, and this depreciation will increase spending and will be a prerequisite for higher consumption in 2019. November Labor Market data showed lower than expected data for employees in the non-business sector, but the fact is that wages are growing at a record pace.

Second, the saving rate appears to be higher due to the increase in household welfare, even though we are in a period of mass sales on the financial markets.

Goldman's forecast comes as encouraging, but it is almost insignificant amid larger external fears and, above all, worries about the trade war with China.

After all, Goldman expects a strong but sluggish growth in consumption over the next few quarters.

Source: CNBC

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