U.S. growth forecasts have been reduced to 5.7% by Goldman Sachs, who revised their predictions for the U.S. economic recovery in 2021. The bank believes that American consumers will be less likely to spend due to an increase of COVID-19 infections caused by the Delta variant.
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U.S. Growth Outlook
Ronnie Walker, an economist, wrote Monday in a report to clients that the U.S. overall economic expansion for this year will now be 5.7%. This is down from the 6% forecast at August’s end.
According to Goldman Sachs’ expert: “The obstacle to strong consumption growth going forward looks much greater: The Delta variant is already weighing on third-quarter growth, and weakening fiscal stimulus and a slower recovery in the services sector will be headwinds in the future.”
Walker states that American consumers will have to face a variety of challenges. “harder road”It’s more than we had anticipated.
According to, the bank also raised its unemployment rate projections from 4.1% to 4.2% by this year.
After the U.S. Department of Labor last week reported that employers added fewer jobs than expected in August, the updated forecast is now available. With the increase in the Delta variant, the unemployment rate has dropped to 5.2%. This signals a slowdown of job growth.
According to USA Today, daily coronavirus infections have skyrocketed by 316% since last year’s Labor Day, while hospitalizations have also soared 158% during the same time in 2020.
According to the report, the high rate of hospitalizations has led to a decrease in ICU beds for patients in many states.
Goldman Sachs revised its U.S. growth forecasts for the third quarter of 2008 from 9% to 5.5% in mid-August. It also increased estimates for Q4 & beyond.
The following was reported back then “The investment bank said the Delta variant was having a somewhat larger-than-expected effect on growth and inflation due to its hit to consumer spending and production.”
According to Goldman economists: “Spending on dining, travel, and some other services is likely to decline in August, though we expect the drop to be modest and brief.”
In a scenario where the fear about the virus would subside, the bank adjusted its U.S. Growth Forecast for Q4 from 5.5% – 6.5%. Retail stock would rebound and the services sector would recover.
Last updated Sep 7, 2021 at 9:29 AM