U.S. gross domestic product (GDP) numbers aren’t going to soar as the year unfolds, as jobs reports won't sustain their upticks and pricey oil eats into consumer demand, says Goldman Sachs chief economist Jan Hatzius.
The economy has added more jobs than expected in recent months mainly due to unseasonably warm weather, which brought some construction projects online quicker than planned.
"The other issue is oil. Our models say that a 10 percent seasonally adjusted gasoline price increase — roughly what we have seen since the second half of 2011 — should take an average of 0.4 points off annualized growth over the following year," Hatzius writes in a report, according to Business Insider.
"That's not yet a huge effect, but it is the sort of magnitude that starts to matter from a forecasting perspective."
Furthermore, low natural gas prices won't offset increases in gasoline prices and lower the country's overall energy bill, Hatzius adds.
The U.S. economy grew 3 percent in the fourth quarter of 2011, up from a revised initial estimate of 2.8 percent, although other economists point out that headwinds still face the U.S. economy on top of rising prices at the gasoline pump.
"We are seeing improving demand for labor and housing. These are very positive trends, but we do have to keep an eye on Europe," says Robert Dye, chief economist at Comerica, according to Reuters.
"We also have to keep an eye on Asia. China is in a delicate balancing act to navigate to a soft landing for its economy. Japan is on its rebuild after last year's tsunami."
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