Looks like someone besides president Trump has bought into the economic impact of the impending new tax law.
Goldman Sachs projected Thursday that the U.S. unemployment rate will reach 3.5% by the end of 2018, better than a prior estimate for 3.7%. The investment bank believes the unemployment rate will bottom for the current economic cycle at 3.3% by the conclusion of 2019. At the end of November, the U.S. unemployment rate stood at 4.1% compared to 4.6% at the same point a year earlier.
"Overall, the [tax] legislation is somewhat more front-loaded than the earlier Senate version, and as a result we expect it will boost growth slightly more in 2018," Goldman Sachs economist Alec Phillips wrote.
As it stands, the slashing of the corporate tax rate is likely to lead to businesses hiring for jobs to support their new capital investments. New jobs may trickle right down to the service sector of the economy -- think a local restaurant needing to hire more staff to handle a new wave of customers.
The economy is already getting a glimpse into the possible effects of the tax law.
Wells Fargo raised the minimum hourly rate for employees by 11% to $15 an hour. AT&T said that it would pay a special $1,000 bonus to more than 200,000 union-represented employees, non-management workers and front-line managers. It also plans to invest an additional $1 billion in the U.S. in 2018.
-Bradley Keoun contributed to this story.
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