Goldman Sachs CEO Solomon says economy softening with tariff chaos hitting growth

David Solomon, Goldman Sachs CEO (Courtesy: Bloomberg)

David Solomon joined his banking peers in warning about a slowdown in the US economy as President Donald Trump’s trade war impacts growth prospects.

“There’s no question we’ve seen some job data that indicates that there has been some softening,” the Goldman Sachs Group Inc. chief executive officer said in an interview Wednesday with CNBC. “I think you have to watch that very, very closely.”

Even as US wholesale inflation unexpectedly declined in August, Solomon said that he sees signs of persistently high prices.

“Trade policy is still getting negotiated and still getting implemented,” he said. “There’s uncertainty where this all lands and no question in my mind that it’s having an impact on growth.”

JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said Tuesday that “the economy is weakening,” and the labor data revision confirms what the bank previously thought.

The number of workers on payrolls will likely be revised downward by a record 911,000, or 0.6%, according to the government’s preliminary benchmark revision. It showed average monthly job growth was roughly half of what the data previously indicated.

Trump seized on the revised labor-market numbers to put renewed pressure on the central bank to rapidly cut interest rates. He used a social-media post Tuesday to rail against the Federal Reserve’s leadership. “Incompetence is more important than to defend theoretical independence,” Trump said in the post.

It’s important “to appreciate how well central-bank independence has served all of us,” Solomon said.

Earlier this week, Solomon signaled there’s no need for the Fed to rapidly cut interest rates, diverging from the Trump administration’s pressure on the central bank. “It just doesn’t feel to me like the policy rate is extraordinarily restrictive when you look at risk appetite,” Solomon said at a Barclays Plc financial-services conference. Investor enthusiasm in markets currently is at the exuberant end of the spectrum, he said.