Goldman downgrades US growth forecast, sees ‘hard way’ for rest of 2021

Goldman downgrades US growth forecast, sees ‘hard way’ for rest of 2021

Economists at Goldman Sachs are forecasting the U.S. economy to grow from 6 percent to 5.7 percent this year, citing the ultra-contagious delta type as the reason for the slowdown in recovery.

Economists say they have lowered their outlook for 2021 because of the delta type that is plaguing the economy.

Those concerns are weighing on all important uses of goods, he says. Consumers are the main drivers of the US economy.

Goldman economists, meanwhile, say the “disappearing financial stimulus” – no more checks in the mail and the federal clash over unemployment benefits – means it is unlikely to move forward. And epidemic chains that are still hampered by the epidemic will also slow growth, the bank said.

Goldman economist Ronnie Walker wrote in a letter to consumers on Monday that it would be a “harder path” for American consumers than previously expected. The bank demanded an annual growth of 6 per cent as per last August forecast.

Already in the third quarter, the data is coming towards a recession, he said.

The revised forecast comes just days after a disappointing job report on Friday. The U.S. was expected to add 750,000 jobs in August, but added only 235,000 instead.

Goldman raised his unemployment forecast to 4.2 percent from 4.1 percent at the end of the year on Monday.

Monday’s report on economic growth in 2021 was more bearish than previous estimates, while in 2022 it was slightly faster than the bank’s August call.

Goldman now expects US economic growth to be 4.6 percent in 2022 – up from the previous 4.5 percent call.

Sneha Mali