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Illustration: Aïda Amer/Axios

Economists at Goldman Sachs raised their GDP growth expectations for the U.S. economy to 8% for 2021 in a note to clients on Sunday night.

Why it matters: If Goldman's forecast is correct, it would mark the largest economic expansion for the U.S. in generations.

  • Not only would 8% annual growth denote a stupendous turnaround from the coronavirus pandemic, it would significantly outpace the firm's growth expectations for the U.S. from as recently as late 2020.

What they're saying: "We have raised our GDP forecast to reflect the latest fiscal policy news and now expect 8% growth in 2021 (Q4/Q4) and an unemployment rate of 4% at end-2021 — the lowest among consensus forecasts—that falls to 3.5% in 2022 and 3.2% in 2023," Goldman said in the note.

  • "But we expect inflation dynamics to mirror those last cycle, and therefore expect this forecast to translate to only 2.1% core PCE inflation in 2023."

Between the lines: Goldman has been exceptionally bullish on the prospects for U.S. growth all year, far outpacing most other Wall Street banks' expectations.

  • The average growth expectation among Wall Street analysts is 4.7%, according to FactSet, and was 3.9% as recently as November.
  • Further, economic growth of 8% with inflation reaching just 2.1% would be almost unprecedented.

By the numbers: A growth of 8% this year would put U.S. GDP at around $22.6 trillion, marking a full recovery after the economy shrank 4.1% in 2020.

  • U.S. GDP hasn't grown 8% in a year since 1951, when it totaled $356 billion.

Of note: Goldman's metric tracks fourth quarter over fourth quarter growth, rather than year over year.

Go deeper

2 hours ago - World

In photos: Students evacuated as wildfire burns historic Cape Town buildings

Firefighters try, in vain, to extinguish a fire in the Jagger Library, at the University of Cape Town, after a forest fire came down the foothills of Table Mountain in Cape Town, South Africa, on Sunday. Photo: Rodger Bosch/AFP via Getty Images

A massive wildfire spread from the foothills of Table Mountain to the University of Cape Town Sunday, burning historic South African buildings and forcing the evacuation of 4,000 students, per Times Live.

The big picture: Visitors to the Table Mountain National Park and other nearby attractions were also evacuated and several roads including a major highway, were closed. South Africa's oldest working windmill and the university's Jagger Library, which houses SA antiquities, are among the buildings damaged.

Updated 3 hours ago - Politics & Policy

3 killed, 2 wounded overnight in Kenosha bar shooting

Three people died and two others were hospitalized with serious injuries after a gunman entered bar in Kenosha County, Wisconsin, the police department said in a statement on Sunday.

The latest: Officers arrested a "person of interest" Sunday afternoon in connection with the 12:42 a.m. shooting and there's "no threat to the community at this time," per a later police statement.

Updated 3 hours ago - Sports

Big European soccer teams announce breakaway league

Liverpool's Mohamed Salah (L) after striking the ball during the UEFA Champions League Quarter Final Second Leg match between Liverpool F.C. and Real Madrid at Anfield in Liverpool, England, last Wednesday. Photo: John Powell/Liverpool FC via Getty Images

12 of world soccer's biggest and richest clubs announced Sunday they've formed a breakaway European "Super League" — with clubs Manchester United, Liverpool, Barcelona Real Madrid, Juventus and A.C. Milan among those to sign up.

Why it matters: The prime ministers of the U.K. and Italy are among those to express concern at the move — which marks a massive overhaul of the sport's structure and finances, and it effectively ends the decades-old UEFA Champions League's run as the top tournament for European soccer.