Tags: Goldman | Cohen | US | economy | Soft | Patch | Double

Goldman’s Cohen: US Is Hitting Soft Patch But Won't Double Dip

Thursday, 23 Jun 2011 02:23 PM

The U.S. economy has run into a soft patch thanks to transitory factors such as bad weather and the Japanese earthquake but will resume stronger growth as the year continues, says Goldman Sachs Investment Strategist Abby Joseph Cohen.

"It's clear that the U.S. economy is facing some transitory problems," Cohen tells CNBC. "The impact of higher energy prices, the effect of the supply chain disruptions in Japan and, of course, the bad weather throughout the United States, including tornado and flood damage."

The U.S. gross domestic product (GDP) grew 1.8 percent in the first quarter of this year, below several economists' expectations.

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Abby Joseph Cohen
(Getty Images photo)
"But our sense is the underlying growth rate of the U.S. economy is about 3 percent even though the GDP for this particular quarter may be closer to 2 percent," Cohen says.

"Our feeling is no double-dip recession. This is a soft patch, not the beginning of a new downturn."

Other notable experts, however, feel the road to global economic recovery is riddled with potholes, including Nouriel Roubini, the New York University economist who accurately predicted the severity of the financial crisis and recession of the last couple of years.

A "perfect storm" of fiscal woes in the U.S., a slowdown in China, European debt restructuring and stagnation in Japan may join forces and pummel the global economy, Roubini tells Bloomberg.

"There are already elements of fragility," Roubini says.

"Everybody’s kicking the can down the road of too much public and private debt. The can is becoming heavier and heavier, and bigger on debt, and all these problems may come to a head by 2013 at the latest."

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The U.S. economy has run into a soft patch thanks to transitory factors such as bad weather and the Japanese earthquake but will resume stronger growth as the year continues, says Goldman Sachs Investment Strategist Abby Joseph Cohen. It's clear that the U.S. economy is...
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2011-23-23
 

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