Goldman Sachs economists revised down their forecast for growth in the US in Q3, pointing to a “harder path” ahead for the American consumer than previously anticipated.
- Economist Ronnie Walker stated overall expansion in 2021 is now seen at 5.7%. That compares with an expectation of 6% published at the end of August.
- Walker stated the weaker growth will follow through into more of a pickup in 2022. Goldman raised its forecast for that year to 4.6%, up from 4.5% previously.
- Walker stated that American consumers are likely to spend less amid the Delta variant’s emergence, fading fiscal support, and a switch from demand for goods to services. He further added that supply-chain disruptions had hit inventory restocking too.
- Walker stated that the hurdle for strong consumption growth going forward appears much higher. The Delta variant is already weighing on Q3 growth and fading fiscal stimulus.
The bank also lifted its projection for the unemployment rate to 4.2% at the end of 2021 from a prior estimate of 4.1%.
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