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Goldman cuts forecast for U.S. economic growth in 2021 and 2022 By Reuters

by Mike Robinson

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© Reuters. FILE PHOTO – A worker in construction climbs over a fence at the location of large public infrastructure reconstruction projects of elevated roads and bridges in Manhattan, New York City. April 22, 2021, USA. REUTERS/Mike Segar

(Reuters] – Goldman Sachs’ (NYSE:) U.S. Economic Growth Target was reduced to 5.6% and 4%, respectively for 2021-2022. The reason is a decrease in fiscal support and a delayed recovery by consumers than expected.

According to Jan Hatzius, the firm’s chief economist, it had previously forecast growth of 5.7% in gross domestic product (GDP), and 4.4% in 2022.

They pointed to “a longer lasting virus drag on virus sensitive consumer services” and an expectation that the supply of semiconductors would not increase until the second half 2022. This will delay stock restocking for next year.

They expect that spending on certain services will remain below the pre-pandemic trend, especially “if some workers shift to remote work causes them to spend less overall.”

Goldman lowered its fourth-quarter 2021 GDP estimate by 4.5%, and its first-quarter 2022 GDP estimate by 5%. It also shaved its estimate for the second quarter 2022 to 4% from 4.5%. The company reduced its estimate for its third quarter to 3% from 3.5%.

It increased the fourth quarter 2022 forecast to 1.75%, from 1.5%.

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