1、Measures of pol icy uncertainty have far surpassed l evel s reached during the firstnTrump administration and coul d rise further as new pol icies are announced andother countries respond to US tariffs.Much of the very recent rise in uncertaintywas rel ated to President Trumps“reciprocal”tariff pl a

2、n,but even with thedetail s of the pol icy now in hand,considerabl e uncertainty about how the pol icymight evol ve,how other countries might react,and the potential for further tariffincreases remains.We estimate the effects on business investment,hiring,andconsumer spending.On business investment,

3、appl ying estimates from our prior research andnacademic studies to the recent increase in uncertainty impl ies a roughl y 5ppdrag on investment growth,which weve incorporated into our forecast.We nowexpect roughl y flat business investment over the next year,and our quantil eregression model s impl

4、 y that the probabil ity of a decl ine in capex over the nextyear has risen to 45%.We expect much l arger effects than in the first trade warbecause far more US companies are l ikel y to be affected by uncertainty aboutUS and foreign tariffs this time,and many more coul d be affected by uncertaintya

5、bout fiscal and immigration pol icy.On hiring,uncertainty about both tariffs and government spending cuts coul dndepress j ob growth.We estimate that trade pol icy uncertainty wil l exert aroughl y 20k drag on monthl y empl oyment growth,that the direct effects offederal spending cuts wil l reduce f

6、ederal government payrol l growth by 25-30kj obs per month this year,and that uncertainty about federal payments wil lreduce hiring by about 35k in sectors that rel y heavil y on federal funding such asstate and l ocal government,heal thcare,and education.So far through March,these potential spil l

7、over effects beyond federal empl oyment have not shown upin the payrol l s numbers.On consumer spending,some decel eration is inevitabl e as l abor suppl y growthnsl ows and j ob growth sl ows al ongside it,and tariffs reduce real disposabl eincome.El evated uncertainty coul d impose two additional

8、drags.First,it hascontributed to the stock market drawdown,which so far impl ies that weal theffects on spending wil l go from a-pp boost l ast year to a pp drag.Second,weaker sentiment and rising fears about j ob l oss coul d boost saving rates,though our model s suggest these survey-based measures

9、 have not al ways beenJan Hat zi us+1(212)902-0394|j Gol dman Sachs&Co.LLC Al ec Phi l l i ps+1(202)637-3746|al ec.phil l Gol dman Sachs&Co.LLC Davi d Meri cl e+1(212)357-2619|david.mericl Gol dman Sachs&Co.LLC Ronni e Wal ker+1(917)343-4543|ronnie.wal Gol dman Sachs&Co.LLC Manuel Abecasi s+1(212)90

10、2-8357| Gol dman Sachs&Co.LLC El si e Peng+1(212)357-3137|el Gol dman Sachs&Co.LLC Jessi ca Ri ndel s+1(972)368-1516|j essica.rindel Gol dman Sachs&Co.LLCUS Economics Analyst The Impact of Uncer tainty on Investment,Hir ing,and Consumer Spending(Rindel s/Abecasis/Mer icl e)6 Apri l 2025|11:07PM EDTI

11、 nvestors shoul d consider this report as onl y a singl e factor in making their investment decision.For Reg AC certification and other important discl osures,see the Discl osure Appendix,or go to following is a redacted version of the original report published 6 April,2025 19 pages.rel iabl e predi

12、ctors in the past.nHow wil l we see the impact of uncertainty in the economic data?We have al ready seen it in survey datain capex and empl oyment expectations and anecdotal commentary in business surveys,and in big-ticket spending intentions in consumer surveys.I n the hard data,we wil l l ook to c

13、apital goods orders and manufacturing construction put in pl ace for the l argest capex effects;payrol l growth in manufacturing for the impact of trade pol icy uncertainty on hiring;and payrol l growth in the government,education,and heal thcare sectors for the impact of federal spending cuts on hi

14、ring.nThe combination of l arger tariffs,greater pol icy uncertainty,decl ining business and consumer confidence,and messaging from the administration indicating greater wil l ingness to tol erate near-term economic weakness in pursuit of its pol icies increase downside risk.6 Apri l 2025 2Gol dman

15、SachsUS Economi cs Anal ystThe Impact of Uncert ai nt y on Invest ment,Hi ri ng,and Consumer Spendi ng Since I nauguration Day,measures of overal l pol icy uncertainty and of trade pol icy uncertainty in particul ar have risen sharpl y.Exhibit 1 shows that they have al ready surpassed l evel s reach

16、ed during the first Trump administration,and they coul d rise further as new pol icies are announced and other countries respond to US tariffs.Much of the very recent rise in uncertainty was rel ated to President Trumps“reciprocal”tariff pl an,but even with the detail s of the pol icy now in hand,co

17、nsiderabl e uncertainty about how the pol icy might evol ve,how other countries might react,and the potential for further tariff increases remains.Whil e uncertainty about trade pol icy is the most extreme,most thematic pol icy uncertainty subindices are above average(Exhibit 2),which suggests that

18、many US businesses wil l be affected even if they are not engaged in international trade.Exhibit 1:Measures of Overall Economic Policy Uncertainty and Trade Policy Uncertainty in Particular Have Increased Notably in Recent Months,Surpassing the 2018-2019 Trade War Peaks 01,0002,0003,0004,0005,0006,0

19、007,000010020030040050060070020122015201820212024Trade Policy Uncertainty IndexIacoviello et al.(left)Baker,Bloom,Davis(right)IndexIndex01002003004005006000100200300400500600198519901995200020052010201520202025Headline Policy Uncertainty Index,Baker,Bloom,DavisIndexIndexAverage since1985:108Month-to

20、-date averageSour ce:Gol dman Sachs Gl obal Investment Resear ch,Pol icyUncer ,Matteo Iacoviel l o6 Apri l 2025 3Gol dman SachsUS Economi cs Anal ystI ndeed,el evated pol icy uncertainty and the threat of tariffs al ready appear to be weighing on confidence among investors,businesses,and consumers.O

21、ur business optimism tracker,a composite of 13 surveys that ask business l eaders about their confidence in the economic outl ook over the next 6-12 months,decl ined sharpl y through March,even before the reciprocal tariff announcement(Exhibit 3).The Impact on Business Investment El evated uncertain

22、ty can cause firms or individual s to postpone irreversibl e investments.Exhibit 2:Thematic Policy Uncertainty Sub-Indices Are Above Average 04812162024280481216202428Trade PolicyEntitlementProgramsTaxesFiscal PolicyHealth CareNationalSecurityGovernmentSpendingHeadline IndexRegulationMonetary Policy

23、FinancialRegulationSovereign Debt,Currency CrisesThematic Policy Uncertainty IndexesLatest,3m AveragePre-2025 Peak,3m AverageAverageRelative to 1985-2024 averageRelative to 1985-2024 averageSour ce:Gol dman Sachs Gl obal Investment Resear ch,Pol icyUncer Exhibit 3:Our Composite Measure of Overall Bu

24、siness Confidence Has Fallen Sharply Since the Election-20-1001020304050-20-10010203040502006200820102012201420162018202020222024Business Optimism TrackerAverageIndexIndexNote:Composite of the 6-months ahead business conditions components of the Dallas,Kansas City,New York,Richmond,and Philadelphia

25、Fed business surveys,the 12-months outlook for the US economy component of the Chicago Fed Survey of Economic Conditions,the optimism about the economy and optimism about own company components of the Duke University,Richmond Fed,and Atlanta Fed CFO Survey,the Conference Board measure of CEO confide

26、nce,the Business Insider CEO Economic Outlook Survey diffusion index,and the NFIB expect the economy to improve diffusion index.Our preliminary estimate for March is based on surveys released thus far.MarchPreliminarySour ce:Gol dman Sachs Gl obal Investment Resear ch,Feder al Reser ve,NFIB,Duke,The

27、 Confer ence Boar d,Business Roundtabl e6 Apri l 2025 4Gol dman SachsUS Economi cs Anal ystAcademic research and our own anal ysis confirm that increases in economic pol icy uncertainty can weigh on investment(Exhibit 4).During the l ast trade war,we found that economic pol icy uncertainty had a sta

28、tistical l y significant but minimal effect on GDP.Exhibit 4 summarizes a range of studies of the impact of pol icy uncertainty on investment,incl uding our own work based on both aggregate and company-l evel data.On average,the studies that use overal l pol icy uncertainty impl y that a 10pt increa

29、se is associated with a decl ine in business investment growth of roughl y 0.3pp,whil e the studies that use the trade pol icy uncertainty index find smal l er effects.The recent increases in economic and trade pol icy uncertainty have exceeded those of the l ast trade war.Appl ying the estimates su

30、mmarized in Exhibit 4 to the recent rise in overal l pol icy uncertainty impl ies a roughl y 5pp drag on investment growth,based on the average of these estimates(Exhibit 5).We have incorporated this drag into our forecast and now expect roughl y flat business investment on average over the next fou

31、r quarters.Exhibit 4:Our Prior Research and Academic Studies Show That Elevated Policy Uncertainty Weighs on Business Investment Growth AuthorsPublicationType of Policy UncertaintyResultsBriggs,Pierdomenico(2024)Goldman Sachs Global Investment ResearchTrade Policy UncertaintyA rise in trade policy u

32、ncertainty to levels observed in the 2018-2019 trade war would lower business investment growth by 0.3-0.5pp.Peng(2024)Goldman Sachs Global Investment ResearchHeadline Policy UncertaintyA 10pt increase in policy uncertainty index leads to 0.2pp decline in business investment growth.Caldara,Iacoviell

33、o,Molligo,Prestipino,Raffo(2020)Journal of Monetary EconomicsTrade Policy UncertaintyA 2 standard deviation shock to the Iacoviello et al.trade policy uncertainty index implies a 1-2%decline in private investment for 1 year.Gulen,Ion(2016)Review of Financial EconomicsHeadline Policy UncertaintyA 10p

34、t increase in the BBD policy uncertainty index leads to a 0.16pp decline in the investment rate(capex/total assets).Baker,Bloom,Davis(2016)Quarterly Journal of EconomicsHeadline Policy UncertaintyA 10pt increase in the BBD policy uncertainty index leads to a 0.3pp decline in the investment rate.Effe

35、ct of Policy Uncertainty on InvestmentSour ce:Gol dman Sachs Gl obal Investment Resear chExhibit 5:Applying These Estimates to the Recent Rise in Policy Uncertainty Indexes Implies a Roughly 5pp Drag on Investment Growth Briggs,Pierdomenico(2024)Caldara et al.(2020)Gulen,Ion(2016)Peng(2024)Baker,Blo

36、om,Davis(2016)-12-10-8-6-4-20-12-10-8-6-4-20Estimated Impact on Investment Growth Based on Recent Increase in Policy UncertaintyPercentage pointsPercentage pointsTrade Policy UncertaintyHeadline Policy UncertaintySour ce:Gol dman Sachs Gl obal Investment Resear ch6 Apri l 2025 5Gol dman SachsUS Econ

37、omi cs Anal ystI n the l ast trade war,we argued that the effects of pol icy uncertainty and financial conditions on economic activity probabl y overl ap.To account for the impact of both channel s on capex without doubl e-counting them,we estimate a vector autoregression(VAR)model of capex based on

38、 changes in our financial conditions index(FCI)and in the economic pol icy uncertainty index from Baker,Bl oom,and Davis.We trace out the impact of the model-impl ied shocks to the FCI and uncertainty on capex,in a simil ar spirit to our FCI impul se to GDP growth.I n our basel ine estimates,we assu

39、me that pol icy uncertainty rises to the l evel we have seen so far.We assume that the FCI tightens further from its current l evel,reflecting our expectation of further tariff increases in the coming weeks.We estimate the FCI s sensitivity to further tariff increases based on moves around this year

40、s tariff announcements.Taken together,our model suggests that higher pol icy uncertainty and tighter financial conditions wil l l ikel y exert a 4pp drag on quarterl y annual ized capex growth,as shown in Exhibit 6.Our decomposition suggests that tighter financial conditions account for about three

41、fourths of the drag,with higher uncertainty accounting for the other fourth.Exhibit 6:We Expect Tighter Financial Conditions and Higher Uncertainty to Weigh on Capex Growth This Year,With Financial Conditions Making Up About Three Fourths of the Overall Effect Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q32023202420252

42、026-6-4-2024-6-4-2024Impact on Quarterly AnnualizedCapex Growth,3-Quarter Centered Moving Average,GS EstimatesFCI OnlyFCI and UncertaintyPercentage pointsPercentage pointsGS ForecastSour ce:Gol dman Sachs Gl obal Investment Resear chI n previous work,we have shown that tighter financial conditions i

43、mpl y both sl ower GDP growth in the basel ine but al so more downside tail risk.A simil ar principl e appl ies to pol icy uncertainty.To quantify how higher pol icy uncertainty changes the bal ance of risks for the capex outl ook,we use quantil e regressions of capex growth four quarters ahead on f

44、inancial conditions,pol icy uncertainty,the unempl oyment rate,and l agged capex growth.We find that higher pol icy uncertainty and tighter financial conditions have both l owered the average expectation for capex growth over the next year and increased the probabil ity of negative growth from 15%in

45、 2024Q3 to 45%now.6 Apri l 2025 6Gol dman SachsUS Economi cs Anal ystThe growth impact is l ikel y to be especial l y l arge in industries that are highl y exposed to trade and where capital investments are l ong-l ived.To test this idea,we regress industry-l evel gross output growth on the interact

46、ion of trade pol icy uncertainty with each industrys capital intensity and the average age of its capital stock.1 Our resul ts suggest that the hit to output growth is significantl y l arger in industries where the average age of the capital stock tends to be higher,as we show on the l eft side of E

47、xhibit 8.On the right side of Exhibit 8,we show the industries most exposed to a capex drag from trade uncertainty shocks.Unsurprisingl y,the capital-intensive manufacturing sector is the most exposed to these shocks.The computer and el ectronic industries are particul arl y exposed because they are

48、 both capital-and export-intensive,and industries l ike appl iances,machinery,and chemical products manufacturing are exposed because their capital stock is l onger-l ived on average.1 I n the absence of industry-l evel business fixed investment data at a greater-than-annual frequency,we use gross o

49、utput growth as our dependent variabl e.Our resul ts are simil ar if we subtract industry l abor costs(proxied by empl oyee compensation growth times each industrys l abor share)from output growth.Exhibit 7:Higher Uncertainty Has Raised the Odds of Significantly Slower Capex Growth Over the Next Yea

50、r 0246810121402468101214-40-30-20-10010203040Capex Growth Scenarios,Given Financial Conditions and Policy Uncertainty2025Q12024Q3DensityDensityAverage Annualized Growth Over Next Four Quarters(%)Sour ce:Gol dman Sachs Gl obal Investment Resear ch6 Apri l 2025 7Gol dman SachsUS Economi cs Anal ystThe

51、 Impact on Hiring On hiring,uncertainty about both tariffs and spending cuts coul d depress j ob growth.I n recent work,our gl obal economics team found that higher trade pol icy uncertainty indeed resul ts in a modest drag on overal l empl oyment,with the bul k of the effect concentrated in the man

52、ufacturing sector.Their estimates suggest a roughl y 20k drag on monthl y manufacturing empl oyment growth from trade pol icy uncertainty.We al so expect federal spending cuts to weigh on federal government payrol l growth by about 25-30k j obs/month over the course of the year.Beyond the federal go

53、vernment,higher uncertainty about federal payments is al so l ikel y to weigh on hiring in private-sector industries that rel y on federal funding and on state and l ocal government payrol l growth.As shown in Exhibit 9,the state and l ocal government,heal thcare,and education sectorswhich have acco

54、unted for a l arge share of overal l j ob growth in recent yearsare l ikel y to be particul arl y affected by federal spending cuts.We estimate that uncertainty about federal payments wil l reduce hiring by about 35k in sectors that rel y heavil y on federal funding such as state and l ocal governme

55、nt,heal thcare,and education,though we did not see any obvious signs of this in the February or March payrol l s data.Exhibit 8:Uncertainty Disproportionately Weighs on Output Growth in Industries That Have to Make Long-Lived Investments 510152025-0.3-0.2-0.10.00.1-0.3-0.2-0.10.00.1Peak Effect of a

56、One Standard DeviationIncrease in Trade Policy Uncertainty onYoY Gross Output,by Age of Capital StockAge of Capital Stock(Years)Average AgePercentage pointsPercentage points020406080100Other services,except governmentHospitals and nursing facilitiesSocial assistanceEducational servicesFunds&other fi

57、nancial vehiclesPrimary metalsMotor vehicles&partsChemical productsMachineryMiscellaneous manufacturingOther transportation equipmentElectrical equipment,appliancesPetroleum and coal productsComputer and electronic productsIndustries Most and Least Exposed to Output Growth DragFrom Higher Trade Unce

58、rtaintyIndex(100=Most exposed)Sour ce:Gol dman Sachs Gl obal Investment Resear ch6 Apri l 2025 8Gol dman SachsUS Economi cs Anal ystThe S&L government,heal thcare,and education sectors were al ready set to sl ow hiring even before uncertainty about federal funding started to rise.These sectors becam

59、e understaffed during the pandemic and have since been engaging in catch-up hiring,which wil l eventual l y end.Taken together,our estimates of the drag from pol icy uncertainty and the fading boost from catch-up hiring suggests that monthl y payrol l growth in these three sectors wil l sl ow by abo

60、ut 60k j obs by end-2025.I n Exhibit 10,we combine our estimates of the impact of trade pol icy uncertainty,federal government empl oyment cuts,broader uncertainty over possibl e federal spending cuts,and the fading boost from catch-up hiring into a forecast for overal l payrol l growth.Taken togeth

61、er,we expect j ob growth to sl ow to about 100k j obs/month by the end of 2025.Exhibit 9:The State and Local Government,Healthcare,and Education Sectors Are Most Exposed to Federal Spending Cuts 010203040Other services(4%)Information(2%)Construction(5%)Manufacturing(8%)Admin.&waste(6%)Transportation

62、(4%)Private education(3%)Scientific and professional(7%)Private healthcare(15%)S&L government(13%)Federal Funding as a Share of Industry Revenues,Top 10 IndustriesShare of Industry Revenues(%)Industry share of employment in Sour ce:Gol dman Sachs Gl obal Investment Resear ch6 Apri l 2025 9Gol dman S

63、achsUS Economi cs Anal ystExhibit 10:We Expect Job Growth to Slow to About 100k/Month by End-2025,Reflecting Drags From Waning Catch-up Hiring in Education and Healthcare,Federal Funding Cuts,and Tariffs Jan-24Jul-24Jan-25Jul-25Jan-26-1000100200300400500-1000100200300400500Payroll Growth by Industry

64、OtherPrivate EducationState and Local Govt.Federal Government HealthcareManufacturingTotalThousands,3m avg.Thousands,3m avg.GS ForecastSour ce:Gol dman Sachs Gl obal Investment Resear ch,US Bur eau of Labor StatisticsThe speed and magnitude of the hiring sl owdown in the sectors mentioned above wil

65、l be important for the unempl oyment rate.We expect tighter immigration pol icy to generate a meaningful sl owdown in l abor suppl y growth this year,and if l abor demand in these sectors sl ows gradual l y,the combination of heal thy l abor demand in other sectors and sl ower l abor suppl y growth

66、woul d l ikel y keep the unempl oyment rate from rising noticeabl y.I n contrast,a more abrupt freeze to hiring in these areas coul d push the unempl oyment rate up more.The Impact on Consumer Spending Some decel eration in consumer spending this year is inevitabl e as l abor suppl y growth sl ows a

67、nd uncertainty reduces l abor demand growth,both of which wil l cause j ob and l abor income growth to sl ow,and the tax-l ike effect of tariffs reduces real disposabl e income.El evated uncertainty coul d impose two additional drags.First,it has contributed to the recent stock market drawdown.I n E

68、xhibit 11,our updated estimates suggest that the weal th effect on consumption is l ikel y go from a-pp boost l ast year to a pp drag.6 Apri l 2025 10Gol dman SachsUS Economi cs Anal ystSecond,weaker sentiment and rising fears about j ob l oss or other hard times ahead coul d al so boost saving rate

69、s and l ower spending.Exhibit 12 shows that the share of consumers who expect higher unempl oyment over the next year in the Michigan survey recentl y hit its post-financial crisis high,as did the share who think they might l ose their j ob in the next few years.Our consumption model suggests that t

70、he effects of these survey-based measures have been modest in magnitude and statistical l y insignificant in the past,though the channel is intuitivel y compel l ing.Exhibit 11:The Recent Stock Market Underperformance Will Likely Turn the Wealth Boost to Consumption Into a Drag-1.5-1.0-0.50.00.51.01

71、.52.02.5-1.5-1.0-0.50.00.51.01.52.02.5Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q220192020202120222023202420252026Contribution toAnnualized PCE GrowthTotalPercentage pointsPercentage pointsGS ForecastEquitiesReal EstateNote:Assumes equity prices remain at their April 4,2025 level and Cas

72、e-Shiller house prices remain at their January 2025 level.Sour ce:Gol dman Sachs Gl obal Investment Resear chExhibit 12:Consumers Expect Higher Unemployment Over the Next Year-60-40-20020406080-60-40-20020406080197819821986199019941998200220062010201420182022University of Michigan Survey:Consumers W

73、hoExpect Higher Unemployment Over the Next 12 MonthsDiffusion indexDiffusion indexSour ce:Gol dman Sachs Gl obal Investment Resear ch,Univer sity of Michigan6 Apri l 2025 11Gol dman SachsUS Economi cs Anal ystMonitoring the Effects of Policy Uncertainty Looking ahead,consumer and business surveys an

74、d management commentary have al ready started to provide earl y indications of the effects of pol icy uncertainty ahead of the effects material izing in the hard data.We provide a roadmap for monitoring the effects of uncertainty going forward.On business investment,business surveys wil l continue t

75、o provide the timel iest readings of the impact on uncertainty on capex.Our future capex expectations tracker shown in Exhibit 13 has been predictive of capex growth historical l y,though it proved somewhat misl eading during the 2022-2023 period when soft data consistentl y underperformed hard data

76、.The tracker increased by 13 points between President Trumps el ection and inauguration but has since decl ined and now stands at a l evel sl ightl y bel ow the average since 2022.That being said,75%of surveyed GS equity anal ysts in our GSAI did not expect firms to del ay or cancel investment as a

77、resul t of tariffs,and the remaining anal ysts(25%)expected firms to delay but not cancel investment on the back of el evated pol icy uncertainty.We al so l ook to management commentary in earnings cal l s for cl ues on how companies are responding to pol icy uncertainty.I n 2024Q4,we found that com

78、panies with greater tariff exposure revised up their 2025 capex forecasts by 3pp l ess than the average company,and that companies exposed to foreign retal iatory tariffs revised their capex forecasts down.I n the hard data,manufacturing structures investment from the construction spending report an

79、d capital goods orders in the durabl e goods report wil l be the timel iest indicators of capex growth for the manufacturing sector,which we showed in Exhibit 8 wil l l ikel y be most affected by uncertainty.6 Apri l 2025 12Gol dman SachsUS Economi cs Anal ystExhibit 13:After Increasing Notably Foll

80、owing the Election and Inauguration,Businesses Future Capex Expectations Have Declined to a Level Slightly Below the 2022-2024 Average-20-10010203040-20-100102030402006200820102012201420162018202020222024Future Capex Expectations TrackerIndexIndexAverageNote:Composite of 6-months ahead capital expen

81、ditures components of the Dallas,Kansas City,Richmond,and Philadelphia Fed business surveys,the 12-months ahead capital spending expectations component of the Chicago Fed Survey of Economic Conditions,the NFIB planning capital expenditures next 3-6 months diffusion index,and the 6-months ahead capit

82、al expenditures diffusion index of the Business Roundtable CEO Economic Outlook Survey.Our preliminary estimate for March is based on surveys released thus far.Sour ce:Gol dman Sachs Gl obal Investment Resear ch,Feder al Reser ve,NFIB,Business Roundtabl eOn hiring,timel y indicators of potential eff

83、ects of uncertainty incl ude the Atl anta Feds future empl oyment growth uncertainty measure(Exhibit 14),the future empl oyment expectations components of Fed surveys,and management commentary about hiring intentions.Providing a simil ar signal to the Atl anta Feds measure thus far,58%of surveyed an

84、al ysts in our GSAI did not expect firms in their industry to reduce hiring as a resul t of tariffs,federal spending cuts,or uncertainty about those pol icies.The payrol l s data wil l al l ow us to track the impact of tariffs and uncertainty about federal spending at a more granul ar l evel.We expe

85、ct the drag from trade pol icy uncertainty to appear disproportionatel y in the fabricated metal s,chemical s,and petrol eum manufacturing sectors,which our earl ier anal ysis showed are most exposed to input cost increases from tariffs.We expect to see drags from federal government spending cuts an

86、d uncertainty about potential cuts in the federal and state and l ocal government,education,and heal thcare sectors.Absent these effects,we woul d have expected the end of catch-up hiring to l ead to a sl owdown in the pace of j ob creation in these sectors from about 100k/month now to about 70k/mon

87、th by the end of the year.As a resul t,we wil l be l ooking for a sl owdown in excess of the 30k we woul d attribute to the end of catch-up hiring as evidence of incremental drags from spending cuts.Thus far,government pol icy changes and associated uncertainty appear to have had onl y a modest impa

88、ct on payrol l growth,though the avail abl e data were col l ected prior to the spike in trade pol icy uncertainty and this weeks l arge tariff announcements.Federal government empl oyment has decl ined by 15k over the l ast two months whil e spil l overs to state&l ocal government,heal thcare,and e

89、ducation hiring appear l imited so far;6 Apri l 2025 13Gol dman SachsUS Economi cs Anal ystpayrol l growth in industries with a high share of immigrant l abor was sol id in March,suggesting l imited impact from the crackdown on immigrants without work permits;and manufacturing empl oyment increased

90、in March.Exhibit 14:Despite High Policy Uncertainty,Reported Uncertainty About Revenue and Employment Growth Has Increased Only Modestly 23456782345678201620172018201920202021202220232024Uncertainty About 4-Quarters Ahead Growth,Atlanta Fed Survey of Business UncertaintySales Revenue Growth Uncertai

91、ntyEmployment Growth UncertaintyPercentPercentSour ce:Gol dman Sachs Gl obal Investment Resear ch,Feder al Reser veOn consumer spending,the Conference Boards measures of consumer big-ticket spending intentions,which are modestl y predictive of durabl e goods consumption outside of recessions,and the

92、 University of Michigans measure of consumer fears of l ayoff risk wil l provide an earl y indication of potential effects of uncertainty.More timel y al ternative measures of hard spending data such as Adobes onl ine spending data,Second Measures brick-and-mortar sal es data,and Redbooks department

93、 store panel,which are predictive of core retail sal es,wil l provide earl y guidance on the path for official hard spending data,where auto,home,and retail sal es are l ikel y to show the effects of uncertainty on consumer spending first.6 Apri l 2025 14Gol dman SachsUS Economi cs Anal ystJessica R

94、indels Manuel Abecasis David MericleDi scl osure Appendi x Reg AC We,Jan Hatzius,Al ec Phil l ips,David Mericl e,Ronnie Wal ker,Manuel Abecasis,El sie Peng and Jessica Rindel s,hereby certify that al l of the views expressed in this report accuratel y reflect our personal views,which have not been i

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