Reluctance by small businesses to hire more workers won't derail the economic recovery, though growth will remain slow, Goldman Sachs chief US economist Jan Hatzius told CNBC.
“I don’t think it’s that big a deal," Hatzius said, referring to a survey released Tuesday that showed small business owners are worried about the economy and in no rush to hire. "It’s clearly a weaker number but it illustrates the continuing gap between the large firms that dominate the ISM survey (manufacturing index) and not much change in small businesses.”
Because of the slow recovery, however, the Federal Reserve probably won't raise interest rates until sometime next year, he said.
“My own view is that we’re not getting a hike in 2010," Hatzius said. "And even a hike in 2011 is less than a 50 percent probability."
Economic growth will be “pretty good” in the second quarter, Hatzius said, although he’s watching economic data, such as Wednesday's retail sales report, for further signs of a recovery.
The economy could falter, he said, if there is a “a new shock in the markets like much worse-than-expected housing price performance, something like that.”