Economics
Goldman Says Rich People Will Drag Down the U.S. Economy by Spending Less
- Wealth effect could hurt GDP growth by 0.5 ppt, economist says
- Spending on jewelry, pleasure boats strongly tied to market
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The stock-market sell-off is going to be a significant drag on the U.S. economy this year as wealthy households feel its impact, according to Goldman Sachs Group Inc.
Lower equity prices could take half a percentage point off U.S. gross-domestic product growth in 2019, with overall tighter financial conditions restricting expansion by around 1 percentage point, Goldman economist Daan Struyven wrote in a note Tuesday. In October, he had said the positive wealth effect from equity gains in 2017 and early 2018 had likely evaporated.