NEW YORK—New research is forecasting there is a bright spot in the economy coming not too far down the road.
A report from Goldman Sachs suggests that after a year-long dip, household cash flow will begin growing again after Christmas, and accelerate through the new year, CNBC reported.
The gains will reverse a year of negative growth of about $600, or 4.2%, in household discretionary cash flow, according to Goldman’s analysis.
“This year, we’re looking at negative discretionary cash flow for the first time since the 2008-09 financial crisis,” Goldman consumer goods analyst Jason English said.
The Big Driver
The biggest driver of the cash flow improvement next year, he said, will be wages.
“That’s good news for retail sales after a yearlong struggle to keep up with inflation, and for the economy’s ability to avoid a recession, according to Mark Zandi, chief economist at Moody’s Analytics, which has a similar forecast of improving consumer finances,” CNBC said.
“Cash flow got hit during 2022 but it’s coming back, and cash flow is what drives spending,” Zandi said. “Businesses are unlikely to cut jobs because they know their biggest problem is finding workers,” Zandi added.
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