The chief U.S. economist at investment bank Goldman Sachs said on Friday that he still feels positive about the domestic economy.
“If you look at what’s going on in the economy on the basis, not just of a bean count, but also surveys of business activity, it still seems that the economy is fairly healthy,” Jan Hatzius told CNBC Friday.
Hatzius noted that even though market watchers have seen weakness in durable goods orders, personal consumption and housing starts, those pullbacks haven't been enough to warrant a downgrade of economic forecasts.
What would trigger a downgrade, the Goldman executive said, would be a significant increase in oil prices and some of the other numbers that come out before the first estimate of the GDP number in a month, and if personal consumption, for instance, fails to rebound in February. The latter number is due Monday.
“The main risk factor we are watching is what happens to oil prices, where some of the risks have developed,” Hatzius added. “We still think they [oil prices] are manageable, and we had already built in some increases in oil prices.”
Hatzius said that when Washington begins cutting the federal budgetsignificantly and engages in “fiscal restraint” to deal with the deficit, it will erode short-term growth. He added, “I would say it’s a matter of when, not if.”
Turning to Japan, Hatzius said the disaster there won't hurt growth in the US, unless the situation takes a major turn for the worse.