Goldman Sachs: U.S. unemployment forecast drops to 4. 1%.

Goldman Sachs sees the U.S. labor market preserving momentum well into 2022.

On Monday, economists in the firm led by Jan Hatzius lowered their year-end 2021 unemployment forecast slightly to 4.1%. For 2022, Hatzius and his team predict an unemployment rate of 3.5%. If achieved, unemployment rates would be at a 50 - year low as the economy grows back from COVID-19 pandemic.

Hatzius says that if employment increased in 2022, it would bring back the economy to full employment.

We expect more solid job gains in the rest of the year. One reason is that labor demand remains very strong. We also see relatively quick job gains from in-person reopening, the expiration of federal unemployment benefits and the return to federal schools, explains Hatzius.

The strong call from Goldman arrives after a considerably bold read on the labor marker for July.

The U.S. economy created 943,000 jobs in July, the highest growth since August 2020. Job growth was also upwardly suggested for May, coming in at 614,000 versus the 583,000 previously reported. For June, jobs saw an upward revision to 938,000 from 850,000. The unemployment rate ticked under 5.4% for July, from 5.9% in June.

Stocks cheered the news despite the strong report and upward revisions likely meaning the Federal Reserve will begin tapering bond purchases sooner rather than later.

The cyclical momentum remains strong though the peak growth hysteria sweeps through Wall Street. Our forward proxy for earnings growth and capital spending trends still point to over-trend growth. July payrolls improved the second month in a row as the supply side impediments previously holding back job gains appear to be easing, said Michael Darda, MKM Partners chief economist and strategist.

Nonetheless, the economy is still trying to recoup millions of lost jobs from the pandemic since the original outbreak. Since March of the last year, the economy has shed 5.7 million payrolls, with much of this deficit still present in the leisure and hospitality industries. These employers lost a total of nearly 2 million jobs since the pandemic brought in temporary shut downs across the U.S.

Remarked Bleakley Advisory Group Chief Investment Officer Peter Boockvar, Bottom Line: After losing 22.4 million jobs in March and April 2020, we've since recovered 16.7 million of them.