NEW YORK: Goldman Sachs Group Inc economists have cut their forecasts for US growth for this year and next to reflect the shake-out in financial markets amid the Federal Reserve’s tightening of monetary policy.

In a report, the economists led by Jan Hatzius said they now expect the economy to grow 2.4% this year and 1.6% in 2023, down from 2.6% and 2.2% previously.

“While this slowdown in growth should help lower job openings, it is also likely to raise the unemployment rate a bit, particularly since the job openings rate typically only falls when unemployment spikes in recessions,” the economists said.

“We remain optimistic that a sharp rise in the unemployment rate can be avoided, especially since typically the job openings rate declines more and the unemployment rate increases less when the job openings rate is very elevated, like it is today,” according to the economists.

The economists projected the unemployment rate will rise to 3.7% by the end of 2023 after falling to 3.4% in coming months.

 - Bloomberg