Goldman Sachs optimistic forecast on US inflation

According to Goldman economists, inflation will ease significantly in 2023 due to the decrease in supply chain problems and the slowdown in wage increases. The institution's economists are optimistic that inflation will fall "significantly" next year. Goldman Sachs analysts led by Jan Hatzius lowered their core PCE inflation forecast, currently at 5.1 percent, to 2.9 percent for December 2023. 12-month core inflation had risen from 4.9 percent to 5.1 percent in September. The statement included the following statement regarding the reasons for the expectation of a decrease in PCE inflation: "While supply chain and transportation problems eased in 2022, automotive and consumer goods inventories recovered from extremely low levels." It was stated that housing inflation peaked and would decline after this, which would lead to a decrease in services inflation. Thirdly, it was stated that wage increases will slow down and "We expect annual wage increases to fall to 4 percent by the end of 2023. This will support the slowdown in inflation in employment-sensitive service categories. With the effect of all these, PCE inflation will decline significantly."