Goldman Sachs Chief Economist: Market forecasts for U.S. GDP are too optimistic

Goldman Sachs has warned that the market's estimate of U.S. GDP may be overly optimistic, as the data vacuum during the government shutdown could cause employment data to eventually weigh on the otherwise optimistic outlook.
Jan Hatzius, chief economist at Goldman Sachs, highlighted that U.S. GDP estimates have risen sharply during the government shutdown, projecting 3.8% in the second quarter and 3.3% in the third. According to some estimates, the figure is even higher: for example, the Atlanta Fed wrote in an October 17 update that third-quarter GDP could be as high as 3.9%.
With the Fed widely expected to cut interest rates at least once more before the end of the year, despite the continued rise in the stock market, is there good reason for Wall Street to celebrate when the growth trajectory looks positive?
"Not really," says Mr. Hatzius, who warns that employment issues could become a "thorn in the side" of the rosy outlook, coupled with changes in business conduct in response to changes in White House policy.
As a result, Mr. Hatzius added: "With labour market indicators often providing more reliable information about current economic growth than preliminary GDP estimates, this weakness reinforces our belief that Q2/Q3 GDP signals are too positive."