Goldman Sachs is warning that U.S. economic growth will stall to just 1.5 percent while the rest of the world will expand at a 3.9 percent annual clip.
The U.S. economy probably expanded at about a 2.5 percent annualized pace in the third quarter, restrained in part by the effects of two hurricanes, economists forecast the government to report on Friday.
The U.S. Commerce Department's official figure had U.S. growth at 3.1 percent after the second quarter of this year – the last quarter for which statistics are available.
President Donald Trump has made 3 percent economic growth a key part of his administration's bar for success.
Goldman also identified 50 stocks best suited for this kind of global economic environment, CNBC reported.
Using what it calls its "rule of 10" the firm found the most growth potential in the consumer discretionary and tech sectors. Criteria for Goldman's "rule of 10" include growth of at least 10 percent in the last two years along with growth forecasts of at least 10 percent in 2017 and 2018. In order to qualify the company must also have a market cap of at least $2 billion.
Some of the notable American companies making Goldman's top 50 list include Amazon, Tesla, Red Hat, and Ulta Beauty, CNBC reported.
Meanwhile, the New York Federal Reserve has scaled back its estimates of U.S. gross domestic product growth for the third and fourth quarter as Hurricanes Harvey and Irma hurt home construction and industrial output in September, Reuters reported.
The regional central bank’s “Nowcast” model calculated the economy was expanding at an annualized pace of 1.46 percent in the third quarter, slower than the 1.70 percent rate calculated a week ago. It estimated GDP is growing at a 2.61 percent clip in the fourth quarter, down from 2.91 percent a week ago.
Elsewhere, the U.S. economy is on track to grow at a 2.7 percent annualized pace in the third quarter, even as data showed home construction fell to a one-year low in September, the Atlanta Federal Reserve’s GDPNow forecast model showed last week.
The latest estimate for third-quarter gross domestic product growth was unchanged from the rate calculated on Oct. 13, the Atlanta Fed said.
For his part, Commerce Secretary Wilbur Ross told Newsmax TV that the economy would be growing at a very healthy clip if it weren’t for the recent string of deadly hurricanes.
“If it weren't for the hurricane, two hurricanes the fact is we would've been over 3 percent this quarter without a lot of the things that we're already doing,” Ross, 79, told Newsmax Finance Insider, economist and moderator Larry Kudlow in a "Newsmax in the Nation's Capital" special sponsored by Newsmax and Google.
“So the notion that we were in some sort of 1.8 percent prison is simply wrong,” Ross said of financial pundits who allege that economic growth is struggling.
Ross also said there are other plans in the wings to boost economic growth.
"Remember, too, after we get the tax (cut), the next program is going to be a big infrastructure program,” he said.
Ross also explained to Kudlow that Trump’s plan to lower corporate taxes will also eventually benefit middle-class workers.
“Most middle-income wage earners are employed by somebody. Most of them are not self-employed people and if more employment comes in, if there are more capital expenditures, more growth, clearly it will benefit those folks,” Ross said.
(Newsmax wire services contributed to this report).
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