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First Quarter Likely Stronger Than Expected: Goldman

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Published: Friday, 15 Apr 2011 | 4:17 PM ET
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Special to CNBC.com

First-quarter growth is likely "stronger than whatever the government is going to publish at the end of this month", Goldman Sachs chief economist Jan Hatzius told CNBC Friday.

Hatzius says that ISM data, used by Goldman's new Current Activity Indicator, are "consistent with significantly more growth than the GDP" data currently indicate.

Goldman's CAI looks beyond GDP to include labor and industrial production data, among others. "If you want to take a broad view of economic activity it does make sense to cast a net as wide as possible," Hatzius said.

Fed's GDP vs. Goldman's CAI
Jan Hatzius, Goldman Sachs chief U.S. economist with a new way to measure economic growth, called the CAI.

But he stressed the CAI is just "one part of the arsenal we look at. I would never say there is one indicator that trumps everything else."

The economist believes the Federal Reserve will not raise interest rates this year or next year because the economy is still weak.

"We think it is going to take a long time before we see any significant change in monetary policy," he said. Removing food and energy from the equation, inflation "came in lower than expected, and ultimately that will be more important for the Fed when setting interest rates."

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First-quarter growth is likely "stronger than what the government is going to publish at the end of this month" based on an economic indicator created by Goldman Sachs.
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