The econ team at Goldman Sachs paints a gloomier picture:
We have marked down our forecast for US economic activity in the first half of 2009; we now expect real GDP to fall at annual rates of 7% this quarter and 3% next quarter (versus declines of 4½% and 1% previously). ... As a result of the additional near-term weakness, we have boosted our expected path of the unemployment rate, to 9½% by year-end 2009 and 10% by year-end 2010; both figures are ½ point above the previous forecast. We have also marked down our estimates for the year-to-year change in consumer prices, to 1% by year-end 2009 (from 1.2% previously) and zero by year-end 2010 (from 0.5% previously).
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