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Goldman's Hatzius Sees 'Sluggish Recovery' in Jobs Report

CNBC

The October jobs report was encouraging, but it doesn't change the outlook for still sluggish economic growth, Jan Hatzius, Goldman Sachs' chief economist, told CNBC's "Squawk on the Street" on Friday.

"I think it's a recovery, but it's a very sluggish recovery," Hatzius said. "Especially given the starting point of very high unemployment, ou would certainly hope for much stronger growth, and you'd probably expect much stronger growth than the numbers we're seeing." (Read More: Pre-Election Jobs Report Shows Some Gain; Rate 7.9%.)

Hatzius continues to expect only 2 percent economic growth next year.

Although job creation was better than anticipated during November, the Federal Reserve is also likely to remain patient. "They want to see stronger employment growth for many months before they change anything," Hatzius said. (Read More: America's Top States for Job Creation 2012.)

Indeed, Boston Fed President Eric Rosengren said the Fed would continue to buy bonds at least until the jobless rate falls below 7.25 percent. The October rate was 7.9 percent.

Hatzius also said Hurricane Sandy will have a small negative effect on gross domestic product.

"You're going to see a hit at the start of the quarter and a recovery at the end of the quarter," Hatzius said. "Having said that, the most important effects of Sandy are the fatalities, the disruption to people's lives, the destruction of property. None of those show up in the GDP, retail sales or industrial production data."

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